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By Root 1155 0

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