DC 37, PBA, Is the UFT Contract Next?
In the spring of 1975 the UFT began contract negotiations, the talks accelerated in the summer and moved to almost around the clock sessions as the September school opening approached. If a contract expired management had free rein and the union had a “no contract, no work” policy. The negotiating committee was going to recommend to the delegates that the union propose a month contract extension and, precipitously the city laid off 14,000 teachers (all elementary school teachers with 5.5 years or less of seniority, French teachers with 15 years of seniority laid off), the delegates voted to strike with cries of “We won’t come back until we all come back.” The city’s position was simple; we’re on the brink of declaring bankruptcy. All contracts would subject to a bankruptcy monitor. (Read about the Detroit municipal bankruptcy here), and the impact of a NYC bankruptcy on the nation was incalculable. (“The Night Shanker Saved NYC from Bankruptcy” here)
On the morning of October 17th, New Yorkers woke to a series of grim headlines. (“Balk by UFT pushing city to default,” in the Staten Island Advance; “Teachers Reject 150-Million Loan City Needs Today,” in the New York Times.)
The city ordered the sanitation department to stop issuing payroll checks, and one bank said it would not cash city payroll checks unless they were drawn on an account held by the bank itself.
New York City’s bonds, issued by the Municipal Assistance Corporation, plunged to between twenty dollars and forty dollars per thousand-dollar face value, and city note-holders began to line up at the Municipal Building in an attempt to redeem whatever they could. That morning, Rohatyn told the press that everything hinged on the teachers’ union: “The future of the city is in their hands.”
It was more than just the future of one city. New York’s bonds were held by banks throughout the United States and around the world. By some estimates, New York’s default would bring down at least a hundred banks, and expose others to liability for selling suspect or fraudulent products.
Economists warned that New York’s default would hurt the dollar abroad. The Dow dropped ten points at the opening bell, the price of gold began to rise, and, as reported by the United Press International wire service, “trading of bonds of other cities and states slowed to a near standstill, and even the prices of most credit-worthy bonds fell.” One newspaper in North Carolina ran a cartoon of a bum lying on trash, under the Brooklyn Bridge, with the caption, “We’re going down, America, and we’re taking you with us.”
There was considerable support to declare bankruptcy, all union contracts and even pension terms might be altered. Behind the scenes the powerbrokers, namely, Richard Ravitch, brokered a settlement. Teacher union president Al Shanker would approve the Teacher Retirement System loaning the city dollars to pay off bonds to avert bankruptcy.
The lessons:
Sometimes, under crisis circumstances, strikes are an essential tool.
A city’s financial situation impacts contract negotiations.
The entire city is impacted by negotiations, labor, management and the economy of the city and beyond.
Virtually all the NYC labor agreements have expired, terms and conditions of the expired agreements remain in place and as the Adams administration began the negotiations economists worry : is the nation on the cusp of a recession.
Yet for all the good news, economists remain worried that a recession is on the way or that the Federal Reserve will cause one in trying to rein in inflation.
In November the Citizen’s Budget Commission, a non-partisan, business oriented think tank mused,
“The November 2022 Financial Plan for Fiscal Years 2023 to 2026 demonstrates that New York City’s long-term fiscal outlook is precarious and worsening. While the City’s Program to Eliminate the Gap (PEG) has provided some ongoing budget relief, increased pension costs due to poor market returns last year swamp those savings and widen future budget gaps to $4.6 billion in fiscal year 2025 and $5.9 billion in fiscal year 2026. Given the significant risk of a recession and other budget pressures, especially future collectively bargained raises, the City should make additional and ongoing efforts to reduce these gaps.
Employee raises of three percent annually would increase these gaps by around $900 million in the first year, increasing to $2.5 billion in the third year. A recession with revenue impacts equivalent to the average of the two recessions prior to the pandemic could cause revenue shortfalls of $4.3 billion in the first year and between $10 billion and $16 billion over 3 years.
The best way to preserve services for New Yorkers when they need them most is to improve the quality and efficiency of the City’s operations today. More transformative changes are needed to ensure future stability.”
JPMorgan Chase points to the slow return to offices,
… Fundamentals point to deteriorating supply-demand in NYC office space… NYC is experiencing the largest reductions in annual per person spending due to work from home trends. …: “Friday is dead forever, and Monday is touch and go”. The share of hours worked remotely is now ~30%, down from a peak of 60% but much higher than 4% pre-pandemic levels.
Partnership for NYC, also a think tank worries about high unemployment and the future,
New York City closed 2022 on uneven footing. The city once again boasts over 4 million private sector jobs, business creation is strong, tourists are returning, and the city’s startups are attracting robust venture capital funding. Yet unemployment remains high—particularly among younger New Yorkers and New Yorkers of color—and a recent decline in job postings suggests the city may struggle to sustain a solid pace of employment growth in 2023.
With all the doubts over what the economic future holds, for the nation and the city Mayor Adams began negotiating labor agreements, beginning with DC 37, and resolved one of the largest unions contracts
See DC 37 website here
3% – May 26, 2021
3% – May 26, 2022, compounded
3% – May 26, 2023, compounded
3% – May 26, 2024, compounded
3.25% – May 26, 2025, compounded
A total of 16.21% in compounded wage increases.
Additions to Gross will be increased by 3.25% effective May 26, 2025.
3. Retroactive Pay from the First Day of the Agreement
4. $3,000 Ratification Bonus
There are a number of other items; lets call them “sweeteners” specific to DC 37.
Adams moved on to the most difficult union, the Policemen Benevolent Association, the PBA, the police union has been without a contract for six years. Pat Lynch, the president of the PBA was battling with de Blasio as well as a “Defund the Police” public sentiment and decided to wait for a new mayor, as the UFT did with Bloomberg/de Blasio. The Mayor’s presser,
The tentative agreement is retroactive, beginning on August 1, 2017, and ends on July 31, 2025 and is retroactive, beginning on August 1, 2017, and ends on July 31, 2025. It includes wage increases ranging from 2.25 percent to 4.00 percent over the contract period an average of 2.7% per year; it also includes an equity fund to increase starting salaries for NYPD officers and to improve the schedule for raises in the early years of employment. Additionally, a new pilot program will allow officers to test working extended tours of 10 and 12-hour shifts. Officers participating in the pilot will work the same number of hours per year, but the program provides greater flexibility to increase staffing during times when crime is highest, or other issues arise.(Note: maybe reduce extreme overtime costs)
Lynch had been involved in an acrimonious internal struggle in the upcoming union election, immediately after the announcement of the contract Lynch announced his retirement and support for a close associate, not the other candidate.
Is the UFT contract next?
It would make political sense to move past the negotiations, the longer the process continues the more contentious, and, Adams is well aware of how Mayor Dinkins’ decision not to negotiate with the UFT, the union most responsible for his 1989 victory, and, his 1993 defeat.
The UFT class size victory in Albany, probably cost the city $1B awaits an implementation plan; the law requires the plan to be approved by the UFT and the CSA.
The Mayor/Chancellor has spun out a host of new initiatives, all of which require close collaboration with the UFT.
The PBA receives a uniform allowance; maybe Teachers Choice can be significantly increased or paid parental leave time increased, all total speculation on my part.
The governor has been battling with the legislature, the budget is two weeks overdue and with supermajorities in both houses the governor’s power is substantially reduced after the approval of the budget. For example, Adams and Mulgrew want to roll back the requirement that NYC pay rent for charter schools, and a number of other bills.
Settling the contract opens the door for the NYC unions, led by the UFT to advocate together in Albany, perhaps beginning to roll back Tier 6.
I’m hopeful, it makes sense for the future of the city, then again …..
