Transit Strike's High Stakes ; Other Unions and Management Teams Watch to See How New York Negotiates Wages and Key Benefits

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It's a collision America is seeing more often: Management tries to have workers move back their retirement age and pay more for healthcare, while workers try to keep their benefits and make up for lost ground on wages.

This labor-management clash forced 7 million commuters in New York Tuesday to resort to bicycling, rollerblading, or just plain hoofing it to work after a 3 a.m. strike shut down the transit system for the first time in 25 years. Bundling up in 20-degree weather, some commuters piled in, four to a taxi, or got caught in traffic gridlock at checkpoints designed to ensure at least four people were in each vehicle.

Some of the issues in the Big Apple - especially the effort to diminish pension and healthcare benefits for future employees - will be watched carefully by other unions. Management teams around the nation will also be watching to see what succeeds and what doesn't.

"The surprise is that it's only now that not just unions but [their members] are starting to cry, 'Where's mine?' " says Ken Goldstein, a labor economist at the Conference Board, a business research organization in New York. "We're paying the price for keeping the lid on wages and costs."

The transit workers in New York started by asking for a 24 percent pay raise over three years. Since the Metropolitan Transportation Authority (MTA) has a $1 billion surplus, the union felt it was entitled to a significant increase.

However, the MTA replied that the surplus did not come from operations but from selling assets. Management's last offer was reportedly for 10-1/2 percent over three years. This would be above the 3 percent settlement for each of the next four years that the Philadelphia transit workers received after a one-week strike at the end of October.

"Three percent per year for three years is considered a good settlement," says Gary Chaison, a professor of industrial relations at Clark University in Worcester, Mass.

Aside from wages, the major issue facing municipal unions is healthcare and retirement costs. In Philadelphia, SEPTA, the Southern Pennsylvania Transportation Authority, started negotiations by asking workers to pay 20 percent of their base pay toward the cost of medical premiums.

The workers eventually agreed to pay 1 percent of their base pay. "It will defray 4 percent of SEPTA's medical costs," says Richard Maloney, a spokesman for SEPTA.

In July in San Francisco, a transit strike on the Bay Area Rapid Transit (BART) was averted after the workers agreed to increase their healthcare contributions from $25 to $75 a month starting in January. …