The Streets Were Paved with Gold (33 page)

The so-called “merit system” also becomes a seniority system. As further protection against “politics,” civil service workers and others pushed for seniority laws. “In the police department, it took ten years to increase the number of black cops from 5 to 7.5 percent,” laments Koch’s Deputy Mayor for Labor Relations, Basil Paterson. “That increase was wiped out in six months by the layoffs.” Why? Because state law requires that layoffs be based solely on seniority. “Look at the police and fire departments,” Patterson says. “The youngest and most active and effective workers were the first to go. Merit should play a role. Opportunity should play a role.”

The civil service often discriminates in another way. It requires promotion from within. Which is fine, until you consider what is within. Few blacks, Hispanics or women populate the top or middle rungs of the civil service. Only 16 percent of the jobs near the top of mayoral agencies were held by women, a late 1977 study by Karen Gerard and Mary McCormick found. In the federal government, says Alan Campbell, Chairman of the U.S. Civil Service Commission, of the top 10 percent of civil service jobs only 4 percent of these are held by minorities and 2 percent by women. Of those eligible for promotion to these top slots—grades 13, 14 and 15—less than 6 percent are minority workers or women.

These dismal numbers are partially explained by another encumbrance
grafted onto the civil service system—veterans’ preference. While the Bakke case and preferential treatment of blacks and other minorities aroused and polarized American opinion, the preferential treatment of veterans wins wide acclaim, or at least silence. In New York, a nondisabled veteran gets 5 percent added to his entrance exam and 2.5 percent to his promotion exam. But he may only invoke this preference once—unless there are layoffs. In the event of layoffs, a veteran gets thirty months’ seniority added to his service. The federal laws are more generous. In the case of layoffs, federal employees who are veterans—including those who served in no wars—get absolute bumping privileges (as was true in New York prior to 1973). Thus a veteran with three years on the job bumps a federal worker with twenty years’ service. The federal government also grants 5 percent extra on exams, even if the veteran seeks a federal position twenty-five years after completing his military service. Forty-seven states give veterans preferences, and several give preferential treatment to the relatives of veterans.

Civil service contributes to bureaucracy. “The City has two personnel systems, a Civil Service and a labor-relations system,” said Mayor Beame’s Management Advisory Board. “These provide total redundancy in many areas”—salary scales, employee-grievance procedures, and work rules are set by both systems. Because it is difficult to single out individuals, to judge work as opposed to test performance, the hot breath of competition is minimized. Our government system would qualify as an ideal antitrust case if government itself did not define a monopoly.

There has recently been some movement to change the system. The amended City Charter repealed Beame’s executive order, going back to Lindsay’s one-in-three rule to select aides. The Beame administration consolidated some job titles (called “broadbanding”), allowing more flexibility in awarding promotions. Labor leaders say they are receptive to further changes. Albert Shanker, president of the United Federation of Teachers, says he would like to “find some method that would allow managers to proceed against incompetent people.” Alan Viani, of D.C. 37, worries about “extreme” reforms but supports more broadbanding, freedom to transfer workers from one department or title to another, and lessening the reliance on written exams. President Carter made civil service reform one of his priorities and labored a modified reform bill through the Congress. Mayor Koch has denounced the system as “an outrage,” and introduced legislation to loosen the civil service strait jacket.

But change comes very slowly. For almost three years, Sandy Frucher, Executive Director of the Temporary State Commission on Management and Productivity, has sought to rouse the Governor and state legislature to amend the state Civil Service law. The Commission has conducted hearings, issued mountainous studies, lobbied legislators, comforted civil service unions, wooed the press.

He might as well have been a diseased animal. His reports were quarantined, as was the truckload of reform proposals gathering dust in the Municipal Library. Trying to change the system, wails Frucher, “is like pushing a boulder up a hill.” The Chairman of the U.S. Civil Service Commission, Alan Campbell, knows the feeling: “I’m not sure one can make it a sexy issue.”

The Civil Service is a toothless tiger compared to the collective bargaining system. “The City’s capacity to act as an arm’s length employer in bargaining with the municipal unions is not what it should be,” mildly concluded the state Charter Revision Commission. The Management Advisory Board put it another way: “A Mayor’s ability to relate to municipal unions as chief manager of the City is sharply limited by his need to relate to them as an
elected
official.” Labor leader Victor Gotbaum, a disarmingly frank man, came closer to the truth when he said a few years ago, “We have the ability, in a sense, to elect our own boss.”

Negotiations are very different in the private and public sectors. The Charter Revision Commission said a public employer differed from a private employer in at least three critical respects: (1) “the Mayor is a political animal who, in many instances, must rely on the support of powerful union forces at election time”; (2) “the City, as employer, is not subject to the same constraints of supply and demand that dictate to the private employer in negotiations”; (3) “the Mayor, because third-party forces outside his control” often arbitrate and order settlements, “cannot say ‘no’ in negotiations and make it stick.” There are other constraints. A government does not generate profits. And a public strike—as the transit workers proved in 1966 and the bridge and toll collectors in 1971—can cripple a city.

Polls suggest public employee unions are not as popular today as they once were. They used to be able to act as a special interest and
yet succeed in not being treated as one. That is changing. Their power was a major issue in the 1977 mayoral campaign and the winner, Ed Koch, was probably their most severe critic. But union power remains vast. In addition to the power to strike, they retain political clout. They can provide a treasure chest of money and manpower for local and state candidates, a power enhanced by the passage in 1977 of an agency shop law increasing their dues. Their raw political power was visible in the 1976 Albany fight over the Stavisky-Goodman bill. Though most state legislators privately believed that this bill—requiring the city to maintain its educational expenditures—was fiscally irresponsible, they voted to override Governor Carey’s veto and Mayor Beame’s objections. Democrats and Republicans, liberals and conservatives, joined in the veto override. The reason: intense pressure from the United Federation of Teachers, including midnight phone calls and threats to run candidates in primaries against legislators who voted “wrong.” The same muscle surfaced in early 1978 when Mayor Koch, who presumably had won a public mandate, asked the state legislature to free 3,000 more managers from union membership. The unions objected, and by early May the Koch administration could find not a single Democratic sponsor of the bill in the Democrat-controlled state assembly.

In some ways, the fiscal crisis lessens the power of the unions. They must temper their demands, worry about other audiences, including the Congress of the United States, forge a partnership with the city/state/and banks to avoid bankruptcy, perform under the glare of constant publicity. But over the first three years of the crisis they also assumed new powers as the city’s chief banker. By June 1978, the municipal employee pension funds were scheduled to have invested $3.8 billion in city and MAC securities—three times the amount invested by local banks. The unions milked this power, using it as leverage in their contract negotiations–no contract, no loan. Another indication of their power is that, strictly speaking, these are not “union” pension funds. Not only did taxpayers contribute roughly 90 percent of these funds, but public officials exercise voting control over three of the five major city pension funds, a power they prefer not to advertise since they traditionally defer to union wishes. In the privacy of their offices, and on condition that they not be quoted by name, some public officials venture that it is wrong for union leaders to control city pension funds, bargaining both as employee and banker.

Municipal unions also exercise management power. Section 1173–4.3 of the New York City Collective Bargaining Law seeks to define “management rights.” It has come, however, also to define union rights. The final sentence reads, “Questions concerning the practical impact that decisions on the above matters have on employees, such as questions of work load or manning, are within the scope of collective bargaining.” Thus unions are free to bargain with management about almost anything. And they have. As we’ve seen, a plethora of work rules—including such matters as class size and maximum caseloads permitted welfare workers—are chiseled into contracts.

To change them the city must negotiate, and that raises still another problem: the city is eclipsed at the bargaining table. The city’s Office of Labor Relations, for instance, had a budget in 1977 that was five times smaller than the $3.6 million taxpayers spent to release city employees to do union work. “I’m outclassed, outmanned, outgunned,” complained Commissioner Russo. “They hire the best lawyers in the country to negotiate for them—firms like Phillips, Nizer or Kaye, Scholer. They can pay a fee of $400,000 for one case. We can’t even hire a $25,000-a-year lawyer.” To save money, in 1976 the city sacrificed 8,000 square feet of Russo’s office space, including five conference rooms. “Because we have no space, we now go to the union offices to negotiate,” Russo says. “It puts us at a disadvantage. The other alternative is to go to a hotel, which is very expensive. You’re in their home. There have been times when Jack Bigel has threatened to throw us out.”

Space is the least of Russo’s woes. He concurs with the Management Advisory Board’s recommendation that the number of labor bargaining units should be reduced from 122 to 10 or 12. The state bargains with only 6. “It’s the biggest problem we have,” he says. “Every unit tries to outdo every other.” To compound the problem, non-mayoral agencies like the Board of Education and the Transit Authority traditionally bargained separately from Russo’s office. Another problem is the absence of a common data base. Thus there can be no agreement between the city and its unions on how well or how badly workers are compensated. In the past, both sides performed as lawyers in a courtroom, making the best possible case, though the city’s was usually the worst possible case since a couple of junior assistants did the work. Determined to correct these deficiencies, the Koch administration assigned some budget experts to Deputy Mayor Paterson and Commissioner Russo’s
office and began to challenge the voluminous briefs prepared by labor consultant Jack Bigel’s firm, Program Planners, Inc. Koch also adopted a policy of tandem negotiations with the mayoral and non-mayoral agencies, pledging the same dollar settlement for each. When the transit workers captured a bigger than expected settlement, the Mayor retreated from this “linkage” policy, claiming the other unions would have to settle for less. Not unreasonably, Victor Gotbaum called him “a bald-faced liar.” By the end of the citywide negotiations, in June 1978, Koch—desperate to produce a settlement to show Washington—awarded the unions more than they ever expected.

A major problem with collective bargaining is perceptual. Russo and many others begin from the assumption that the municipal unions have too much power; union leaders think they have too little. “To a great extent, the servants have become the masters,” says Russo. Bigel, on the other hand, says, “I have a sense of inequality. I sense that management has more power. It is management that determines the economic fruits for its employees. We have the right to grievance. They have the right to layoff. They have the right to determine people’s lives. A union is a defensive instrument.” To say that municipal unions have too much power, argues teachers’ union president Shanker, is to forget the time when individual citizens or groups couldn’t “sue the sovereign. In a democratic society individuals can sue the government as equals.… The issue is one of democratic values in a pluralistic society. In a pluralistic society workers do have the right to strike. The final answer is not the government.” Shanker concedes unions are special interests—“But I don’t think public officials necessarily represent the public interest.”

New York’s fiscal crisis subjects the collective bargaining system to new tests. Traditionally, it is a trading system, a process where workers demand more and city officials, defensively, merely seek to hold down the cost of a settlement. Both sides claimed victories: unions when workers improved their economic condition; City Hall when a strike was avoided. But today there is no
more
to give. For the first time, city officials are publicly striving to regain management prerogatives and reduce fringe benefits. The rules have changed. Yet it’s unclear whether the game has. Can government reconcile taxpayers’ desire to pay less and receive more services, and the desire of employees to earn more and work less? Will there be strikes? Can union leaders, with an appreciation of
the budget crisis, buck the legitimate thirst of their members to at least keep pace with inflation and be reelected union leaders? Does the fiscal crisis provide an opportunity to carve a new middle ground, one concerned with economic justice for citizens as well as workers? One that permits the introduction of radical changes in the delivery of services, including competition between public and private concerns, worker cooperatives or gainsharing, with savings passed on to the public and workers? Is government, which is laborintensive, doomed to suffer costs which grow considerably faster than its productivity, setting up an inevitable clash between worker and taxpayer?