Once Covid-relief money runs out huge MTA fare increases are in store. Blame the unions. 
The Citizens Budget Commission (CBC) Analysis of the New York MTA’s Operating Budget shows a looming shortfall. That forecast does not include a union contract up for renewal.
In 2029, CBC projects the MTA will face a budget gap exceeding $900 million, once the benefit of federal COVID-related is exhausted. The MTA has wisely spread out the benefit of federal pandemic aid through 2028. Furthermore, after a short-term infusion of revenues from casino license fees, the recurring tax revenue is likely to be $300 million lower after the three licenses are issued.
The cost of the Transport Workers Union (TWU) Local 100 collective bargaining agreement, extended across the MTA, exceeds budgeted raises by $330 million annually. CBC estimates that the cost of the TWU deal would exceed the budget by approximately $765 million in the first three years of the contract. Baseline costs will increase by $330 million annually thereafter.
To stabilize finances, the MTA should implement one-person train operation (OPTO) on subways and proof of payment on commuter rail, industry standard practices that would increase efficiency.
New York City Transit (NYCT) predominately uses two-person train operation, with an operator and a conductor on each train, while OPTO is standard operating practice in most other large systems, including Chicago, Boston, Philadelphia, and Washington, D.C.
While ridership is down overall, changes vary across stations; an analysis by the State Comptroller found that some stations seeing higher levels than pre-pandemic, while others are significantly lower. Despite these shifts, the MTA has not yet made major service adjustments to either reduce or redistribute service to increase efficiency and provide high-quality, reliable service. In fact, a modest effort to align service with current demand was challenged and halted by TWU.
Contractual work rules and collectively bargained agreements should not stand in the way of adjusting transit service to align with ridership trends and evolving needs. The TWU and MTA should negotiate changes that provide the flexibility and adaptability needed to deliver cost-effective service levels aligned with transit rider needs.
Musical Tribute, Wrong City, Right Idea
Public Unions Should Not Exist
Public unions should not exist. Even FDR recognized that.
For discussion, please see Public Unions Have No Business Existing: Even FDR Admitted That
All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. It has its distinct and insurmountable limitations when applied to public personnel management. The very nature and purposes of Government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with Government employee organizations. The employer is the whole people, who speak by means of laws enacted by their representatives in Congress. Accordingly, administrative officials and employees alike are governed and guided, and in many instances restricted, by laws which establish policies, procedures, or rules in personnel matters.
Particularly, I want to emphasize my conviction that militant tactics have no place in the functions of any organization of Government employees. Upon employees in the Federal service rests the obligation to serve the whole people, whose interests and welfare require orderliness and continuity in the conduct of Government activities. This obligation is paramount. Since their own services have to do with the functioning of the Government, a strike of public employees manifests nothing less than an intent on their part to prevent or obstruct the operations of Government until their demands are satisfied. Such action, looking toward the paralysis of Government by those who have sworn to support it, is unthinkable and intolerable. It is, therefore, with a feeling of gratification that I have noted in the constitution of the National Federation of Federal Employees the provision that “under no circumstances shall this Federation engage in or support strikes against the United States Government.”
Oakland Teachers Strike in 5th Day Over Climate Justice, Homeless Housing, Reparations
On May 10, I noted Oakland Teachers Strike in 5th Day Over Climate Justice, Homeless Housing, Reparations
Hoot of the Day: The UAW Demands a “Just Transition” to Electric Vehicles
On May 15, I noted Hoot of the Day: The UAW Demands a “Just Transition” to Electric Vehicles
The latter example is at least private union. Unlike public unions, private unions can drive a company to bankruptcy. GM is an excellent example. The airlines are another.
But no one negotiates the other side of public unions. Corrupt politicians get in bed with corrupt union leaders.
It is nearly impossible to get rid of a bad teacher, even a child molester unless they are convicted criminally. The same applies to corrupt police officers.
FDR had it correct: All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service.
Nonetheless here we are by executive order 10988, later expanded across the board.
Executive Order 10988 is a United States presidential executive order issued by President John F. Kennedy on January 17, 1962 that granted federal employees the right to collective bargaining.
Biden is cheerleading unions and more price inflation every step of the way.
i 100% concur government unions are dumb. FDR was correct. so is a standing army. the constituitin got it correct. a navy is needed. we can muster an army easily if any invaders look on the horizon. NOT to defend big oil in hormuz or coke and chiquita in latin world…………..and on and on. stop the madness. ain’t happening. we will drive over the edge. no doubt.
Mustering and training just doesn’t happen as quickly as it did in the good old days.
the reserves old gal. weekend warriors. defend NY and SC instead of bush crime family in iraq. this isn’t complicated. you have been HAD.
I think the big problem is that they don’t have the riders anymore, now that people aren’t swarming to places they don’t need to be every day.
moved back to brooklyn 2 years ago after being gone for 30 years. in other cities and wine country. not many cities in the world one really can live nicely without an auto. i ride the subway round trip to manhattan about twice per week. it’s always filled, but not jammed like pre plague years. the cost compared to auto is ridiculously cheap. all in about 350 federal reserve notes. i haven’t seen any crime or felt threatened. nothing like the bad old days of 70s to early 90s. even if cost doubled it’s still great. nyc we walk everywhere, so great excercise. i liked driving but this life is way less stressful and more healthy. in nyc i walk at least 3 miles per day doing nothing much but general life chores……..about a month ago we were on the train past midnight. it was very crowded and safe. i always tell people to turn off the idiot box and live life. the murder rate in usa is basically zero. in my entire life i only witnessed a few murders on streets of usa. that’s a ridiculously safe 63 years.
Interesting anecdotes.
If you’d like I will buy you some capital letters.
pithy and idiotic response lisa. i’d expect more. i’m assuming a bad day. i forgive you, my dear. bless your heart.
“Don’t look a gift horse in the mouth — it may be the opportunity you’ve been waiting for.”
“Oakland Teachers Strike in 5th Day Over Climate Justice, Homeless Housing, Reparations”
None of which is in their job description. Additionally,t he California state department of education is finalizing their plan to turn the math curriculum into a Marxist social justice program. Marxism is not a function of math.
The social contract which has supported all large American cities since the beginning of industrialization, has failed. Get out while you still have property value to sell.
And then there is a rampant crime problem in NYC. Of those remaining, how many want to risk being attacked? And how many riders were lost to the Great Resignation (move out of NYC or find a job closer to home)?
Metro riders feel unsafe in L.A. as well. Two bus drivers were recently stabbed, for one. The Metro system is now considering to create their own police force in an effort to deal with the problem on commuter busses, trains and subways.
The solution to the union problem is to replace all human workers with automation/robots.
If I owned a company today, this would be my focus.
The foundation for Keynes’ predicted 15 hour workweek 90 years ago.
With robots doing all the work, there will be ZERO hour workweeks!
It’s inevitable, maybe not in our time but I’d love to be a fly on the wall for the debate between extreme left and right when there are no jobs
As a rich guy, if we get to that point, I hope we just redistribute everything. I’d prefer that to being killed by a mob/watching the world burn from atop my pile of money, anyway.
Walt, at that point the donor class will have lobbied for a new crime bill to incarcerate non-productive citizens
Will never happen. There will always be jobs where a human worker makes a lot more sense than a robot.
Apparently everyone will have to learn to be entertaining.
if you have never read, check out “in praise of idleness”. only an essay by a profound man, a century ago.
.https://harpers.org/archive/1932/10/in-praise-of-idleness/
Years ago, here and elsewhere, I wrote that when you magnanimously give the lowest tiers of workers raises so they can have a “livable wage”, then everyone above them is going to want raises also, as our work economy is stratified and everyone wants to maintain their relative position in it.
This will drive inflation higher but everyone will still be in the same relative economic position when all is said and done. We’ll all just be paying much more for everything from food, cars, to housing to services.
This is what is happening now.
“…everyone wants to maintain their relative position in it.”
I think this is the difference in view is between the top 1% and the rest.
The average Joe wants to make enough to have something leftover after bills, CEO’s want the status of making 400X median wage, where it was 100X 40 years ago.
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It applies across the gamut, not just CEO’s to everyone else.
Some average Joes just want a bass boat and a camper and a snowmobile.
THAT’S a great deal of toys, for an adult. rich world brats in middle age are a thing to behold, imho. amerika is a petting zoo of middlebrow children masquerading as adults.
I know.
You can’t tow the bass boat and the snowmobile at the same time.
You need the camper for the bass boat.
Child molester? Surely you mean ‘minor attracted person’?
You are commendably using ‘government employee’ instead of ‘public servant’.
I have never encountered a case in which an organization attained the title “service” without thinking other people are there to serve them.
Getting back to “Fridays being a poor day for productivity” topic, Since the Democratic States primarily shuttered businesses and promoted lockdowns, they are reaping what they sowed. What happened? To consolidate power and help trainwreck the Trump economy(to get him out of office) they killed the commuter culture. Now Dems and businesses want everyone to go back, but workers are not buying it. Inherently, their political game created a new business model for Work at Home culture and Zoom and Amazon. So now what?
So now we adapt.
And those who are used to feeding at the trough will have to find another trough.
This is still true today.
https://www.thefarside.com/2023/07/14/4
I would blame poor management as much as the unions. Any management team that accepted a union contract which doesn’t allow transit service changes to adjust to changes in ridership should be fired. Time to renegotiate the contract or if that fails, just reduce service (or completely stop service) until the budget shortfall is eliminated.
Overall, capitalism is one guy trying to gain more than the other in a large pool who’s participants are all doing the same.
Unchecked Government is corrupt, so are private entities, when those two find ways to collude it hurts those who haven’t the means to collude, mainly in the form of campaign donations (which have become unchecked in recent decades).
So, in my opinion, the only way to fight that “means to collude” for the rest is organized labor.
Bribery creates a massive imbalance of power, it cripples Democracy, until recent years I despised unions, then came Citizens United.
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“whose”…We really need an “edit” here…
WMATA (Washington DC) isn’t far behind @ a $750 million budget gap.
https://ggwash.org/view/90027/breakfast-links-wmata-we-need-dedicated-operational-funding-or-else
I am so tired of this misdirected blame game. One side says blame the greedy workers (unions). The other side says blame the cheap users of the service.
In truth, both sides have a valid grievance which is that things cost too much. Mish says blame the unions. OK, without unions the workers would just have to take less pay. In New York City, one of the most overpriced crapholes in the world. On the other hand, things cost what they cost so maybe the fares just need to go up.
This is how the con men running the economic clown show have us at each other’s throats. The truth of the matter is that ALL of these issues stem from ONE root cause: we all got conned into accepting FAKE money (fiat currency) as if it were real. This fake money sucks all the wealth in the system away from the working class who ride the metro as well as the union employees that operate it and that wealth is funneled toward those who know what is really going on: the monied elite.
110% agree on all points but that fiat currency is the cause.
It’s not Fiat, but – “…wealth is funneled toward those who know what is really going on: the monied elite.”.
Meanwhile, yet again, Clarence Thomas has a new new scandal, this time his aide accepted Venmo payments directly from lawyers with cases pending.
“Money is free speech”, regardless if it’s fiat or not.
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It’s not Fiat, but – “…wealth is funneled toward those who know what is really going on: the monied elite.”.
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Which is exactly what happens, always and everywhere, in any possible universe, when money is being printed up out of nowhere: Someone, meaning those who first receive the money, WILL be able to buy things they did not work for. Hence bidding up prices until those who have to work for it, have to work harder and harder and harder….. No new real wealth is created as a result of putting faces on paper pieces. Yet soeone gets wealthier… Now, what does basic arithmetic then guarantee must happen to the rest?
There is no yabuts, nor other ways about it. That is what printing money does. And also THE ONLY THING printing money does: Transfers purchasing power; aka wealth, hence power: FROM those who work to create real wealth; TO those who simply sit there receiving either free money directly, or indirectly via increased asset prices which will always result from there being more money around. It does not do anything else. NO magic economics’y sounding acronym jargon, which lightweights are fond of tossing around like as if they were somehow independent magic spells. Just pure and simple redistribution of wealth: From wealth creators, to those connected to the money printers.
That some illiterate fashion icon of the political Left, happened to make some catchy sounding quip about crosses of gold decades ago, changes none of that. If money is printed up: Those who receive, get richer (duh!) And ditto those who nominally “own” assets; which, like all else WILL become more expensive as a result of more money bidding for them, than of less. Logic does not get more elementary than that.
The problem is no one is riding public transit now after Covid. It’s not just in NY, it’s EVERYWHERE. So raising fares won’t help because that just leads to even less ridership.
Any sane business (not a government that can lose money) would force the next contract wages to be based on ridership and they’d remove the extra operator on the train that’s not needed in any other city in order to make it fiscally solvent.
Things don’t ‘cost what they cost’. I am certain that they could find people more than willing to do those jobs for less money. But because it’s unionized they aren’t allowed to do that. That’s Mish’s complaint (and mine too). Governments especially should be allowed to solicit workers willing to do the job for less money. Plenty of immigrants would assuredly do it for less so that the public gets more for their money (better service).
with regards to your first paragraph, violent crime is also a factor on lower subway ridership
It’s a big part now especially for women with children.
A lot of companies pay for employee mass transit costs. I live in the DC area and I think every government employee gets reimbursed for metro fees.
That’s government workers for you. The private sector normally doesn’t re-imburse mass transit costs. At best, many private employers provide a pre-tax option. You save a few bucks with that option, but if you’re going to Manhattan or DC using mass transit, you can expect to shell out anywhere between $2,000-5,000 a year just to use these services.
Also, the DC Metro and MTA services are not even close to being in league with Japan or elsewhere. Not that I expect government services to be good, but the DC Metro and MTA have very different definitions of what ‘providing quality service’ means compared to other options.
Moscow and St. Petersburg subways.
Agreed. Public agencies or government funded roles being unionized is a conflict of interest. We see the cost continuing to rise, yet no way to adjust overhead cost (wages) to be in line with demand for the service provider. I’m very familiar with this industry…. It’s bad.
When you look at the ALL years option, it’s very apparent that the rich have gotten vastly more rich, especially in the last 3-4 years.
https://www.newyorkfed.org/markets/desk-operations/reverse-repo
There’s a mountain of cash just sitting out there making banks $100B in FREE F’ING money each year. It’s just sickening. The vast majority of all this extra money is sitting in hedge funds & money market accounts. This is the very reason why the Fed should be accelerating their runoff by selling treasuries to soak up all the extra cash. Now, they’re talking about changing capital requirements, when they did away with reserve requirements over 3 years ago. They’ve basically introduced the concept of unlimited backstopping for banks. And, the Fed has no business buying or selling anything other than 7 year and under treasuries. They should be statutorily barred from trading in longer dated treasuries. Manipulating the long-end of the curve is just criminal.
As an aside, it’s amazing how NO ONE EVER says anything about how overvalued homes are. They hammer on and on about lack of new & existing inventory when the Fed is directly responsible for 60% of all mortgages having 4% or less rates. We have an affordable housing crisis not a numbers crisis that’s being made worse by this large swath of homeowners who are trapped in their homes. Everyone is yammering for lower rates instead of a good old-fashioned recession to hit housing prices to the tune of 25%. Builders are still sitting on enormous gross margins on houses which is contributing to the anti-gravity prices of housing.
COVID pushed the Fed / Congress reaction into massive printing press mode which now seems to be permanently ingrained in the system.
I want politicians to stand up and ask this critical question: when the next big recession hits, will Congress roll out rent & mortgage relief? That is the single most important issue that will determine whether or not home values return to anything close to a sustainable level.
“Contractual work rules and collectively bargained agreements should not stand in the way of adjusting transit service to align with ridership trends and evolving needs.”
Utter crap on not honoring the collective bargaining agreement. If the MTA wants to adjust the existing contract, then provide a quid-pro-quo for the union members. This is the way collective bargaining agreements work.
I agree. Any forward looking contact is a form of gambling. MTA agreed to the contract because it gambled that doing so was in its best interest. It lost the bet and so now the unions should care? NO. Because the next time a gamble is made the unions will lose. Will the MTA step in to fill the gap? NO.
If you make a deal, stick to the deal. A better idea would be to not try to gamble 4-5 years in advance. Gamble 1-2 years at time.
Mish would be the first to say that banks are crooked because they get to privatize the gains when things are going their way but then they change the rules and socialize the losses when things turn against them. That is the same thing the MTA is trying to do here. Had their gamble been winning they would be telling unions to lie in the bed they just made.
“If you make a deal, stick to the deal.”
Of course. Those who did sign the deal should stick to it.
As for anyone whose voluntarily rendered signature is not on those deal papers: They have exactly one hard zero obligation to pay a dime for any of the silliness.
True. Then the MTA can go bankrupt and fire everyone. Seems renegotiation would be preferable. This problem is happening in every major city. Covid has killed expected mass transit revenue. Probably won’t return for a decade or more.
“Then the MTA can go bankrupt and fire everyone.”
Exactly!
Just like any other organization which cannot afford to hold up their end of bargains they entered into. From banks to Social Security to the US Federal Government.
THE one thing which is important, is that never, ever; come what may; should as much as one single penny be taken from any non voluntary-signatory party; in order to supposedly prevent the always-in-no-way-worse, and always-just-as-acceptable as any other possible outcome of any given venture, outcome that is bankruptcy.
There is NOTHING, not one thing, worse about bankruptcy, than about not-bankruptcy. That ventures which do not work out, are put and end to, is exactly what needs to happen. Only halfwits incapable of even the most rudimentary of abstract though, suffer from delusions as silly as the one that bankruptcy is some sort of bad thing, in an uncertain environment.
Presumably you didn’t click and read the article.
It’s saying that the projections for the huge losses are for future contracts if nothing is done, not the existing one they have now with the union (which expires in 2026). The article clearly states that the MTA needs to start the process now for the next contract so it avoids the 900 million shortfall.
The problem is that public unions don’t accept anything less than what they have now and will obviously want even more money/benefits. So the big question is what’s going to give. To me, Mish and just about any other sane person, the answer is the MTA should force the union to accept less money if ridership is down AND go to 1 worker per train to cut costs.
The contract is the contract. Maybe next time the contract will include a provision about what to do if ridership makes a step change, but for now the existing terms apply.
Life was just so much better when we didn’t have to pay those darn workers. Then things changed *****
Democrats have bought union votes for decades. Now they’re trying to buy the votes of student loan borrowers.
They’re trying to buy EVERYONE!
https://nypost.com/2023/07/15/nyc-bias-suit-black-hispanic-teachers-and-ex-teachers-rich/
$1.8B to pay way’s basically reparations. I don’t see how NY can afford this stuff, especially if the GOP is able to turn off to some extent the massive overspending.
Massive over spending is establishmentarian bi-partisan.
The mathematical fact is that the national debt is on a parabolic arc trajectory. A Great Reset is coming, considering all parabolic moves fail, as they are mathematically unsustainable.