After years of belt-tightening, municipal employees are starting
to catch up as they tap into the budget surpluses in most cities and
Although their new contracts are not fat - and they don't look
anything like the money flowing on Wall Street - the gains are
improvements over the give-backs and zero-percent increases of the
In some ways, they are a testament to a somewhat renewed vigor in
the labor movement. But the better contracts also are a result of
the tight job market, in which cities and states are competing
against corporations' signing bonuses, profit-sharing, and stock
Yesterday, in one of the latest examples of the shift in pay
policy, the New York Metropolitan Transportation Authority (MTA)
reached a tentative agreement to give its 33,000 contract workers
14.3 percent over three years.
The agreement, which was less than the 27 percent demanded by the
workers at the start of negotiations, is a considerable improvement
over its last four-year contract in 1986, which included a year with
no pay rise.
"A lot of workers, whether it's in the public or private sector
are just beginning to catch up," says John Howley, director of
public policy for the Service Employees International Union in
The new contracts are not going to make workers rich, but they
will result in a few extra dollars after inflation. This year,
locals with the American Federation of State, County and Municipal
Employees have reached agreements with four states and three major
cities, with pay hikes ranging from 3 to 3.5 percent over three
years for Pennsylvania to 3.5 to 4 percent over three years for
Cheye Calvo, a labor specialist at the National Conference of
State Legislatures, says wage increases have pretty much kept up
with productivity improvements. But he notes that some states are
now trying to find nonwage ways to improve compensation, such as
paid parental leave or benefits packages that become income if the
total allotment is not used.
"For the most part, I think you can say employer and employee
relations have been more congenial," he says.
However, that wouldn't be true in New York where the city went to
the courts to prevent the transit workers from walking off the job.
Under state law, it's illegal for workers to strike. A judge in
Brooklyn said if the workers struck, he would fine each worker
$25,000 per day (with the fine doubled each day of a strike) and the
union $1 million per day (with the fine doubled for each day of the