NY Transit Strike Reflects Unions’ Resolve on Pensions

On December 19, no one thought that the New York Transit Workers Union would strike. After all, its members hadn’t actually walked out in 25 years.

But at 3 a.m. the next morning, that’s exactly what the 33,700 workers did, putting the city in gridlock for the next three days.

At issue was the Metropolitan Transport Authority’s proposal to require new workers to contribute 6 percent of their salaries to their pensions, up from 2 percent for current workers. On Day 3 of the strike, the MTA agreed to take the pension requirement off the table. Under the final proposal, workers will get an average 3.5 percent raise per year, among other things, in exchange for agreeing to contribute 1.5 percent toward health insurance premiums.

As the New York Transit Workers strike demonstrates, unions are willing to go to the mat to protect pensions. “We are beginning to see a push back on the part of organized labor,” says Marick Masters, a business professor at the University of Pittsburgh. Particularly as the baby boomers approach retirement, these workers are ready to fight harder than ever to preserve these benefits.

This victory will inspire confidence in other unions, both in the private and public sectors, labor lawyers predict. Given the high profile of the transit workers strike, it may cause other unions to step up their militancy, says Gerry Hathaway, a shareholder at Littler Mendelson, a New York City labor and employment law firm.

There already has been an increase in strike activity. In the third quarter of 2005 there were 105 strikes nationwide, up from 82 for the same period in 2004, according to BNA, a Washington, D.C.-based business news publisher.

Labor watchers attribute this increase to the rift in the AFL-CIO, marked by the departure last summer of the Service Employees International Union, the International Brotherhood of Teamsters and the United Food and Commercial Workers. They have formed the Change to Win Coalition.

“Change to Win has said that one of its main goals is to preserve retirement security, which includes pensions and health care,” Masters says. That call is being heard by all unions–even those that don’t belong to the AFL-CIO, he says.

It seems that some employers are starting to take the threat of a strike more seriously. Delphi, which filed for bankruptcy in October, was met with much public criticism when it proposed reducing its workers’ hourly wages and benefits by two-thirds.

After opposition from the United Auto Workers and the threat of a possible strike, CEO Steve Miller said in December that he would draft a new proposal. “Delphi is under heavy pressure from General Motors to avoid a strike,” Masters says, noting that as that possibility became more real, Miller was forced to concede.

Employers need to be proactive and talk to their unions about their grievances and figure out how to resolve them, says Philip Rosen, a managing partner in the New York office of Jackson Lewis, a national labor and employment law firm. “All employers need to deal with this or risk being taken by surprise,” he says.

—Jessica Marquez