MUNICIPAL WAGE POLICY
On June 30, 1990, contracts between the city of New York and most of its unionized employees expired. The relatively new Dinkins administration began its first round of collective bargaining. Its initial settlements with the United Federation of Teachers in early October 1991 and two other large municipal employee unions a few weeks later were widely criticized as too generous, adding to the city's mounting fiscal woes.
This chapter presents a general framework and specific recommendations for an alternative municipal wage policy better suited to the economic and fiscal conditions of the early 1990s. Three guidelines are presented: (1) the average increase in compensation for municipal employees should be significantly below the projected regional rate of inflation; (2) there should be substantial variation among specific occupations around the average increase based on the city's ability to attract qualified workers for the job title--that is, occupations for which there are shortages should receive above-average increases, and occupations with an abundant supply of qualified applicants should receive little or no pay increase; (3) employee groups who agree to changes in work rules that yield recurring productivity gains should receive additional compensation based on a principle of gainsharing between the city and the workers.
The remainder of this chapter presents the information on which these recommendations are based. The first section describes the structure of municipal labor relations. The second section traces the pattern of settlements