The Streets Were Paved with Gold - Ken Auletta [32]
Per employee compensation, despite the increasing severity of the City’s financial problems, rose 51 percent in four years, higher than in either previous four-year period; at the same time, the number of police officers dropped 2.1 percent, and total hours worked fell 3.7 percent. Thus in the course of four years, local taxes for police services rose $270 million, almost 50 percent; the compensation of police officers increased over 50 percent; and the number of police officers, and hours of police service delivered, actually declined.
A decision that seemed just and sensible in 1958, which was to promote efficiency and stability, greatly altered power in New York. Before he died, Liberal party and United Hatters union chief Alex Rose, one of the advisers who urged Wagner to sign the order, told me he thought it was “a mistake.” He observed that city workers were not like the trade unionists he led because “the city is not an employer in the traditional sense. Profits do not exist. Workers are not extracting a share of the profits but rather a share of taxes. Unlike bargaining in the private sector, municipal collective bargaining is part of the political rather than the adversary process. Therefore, municipal unions are really a pressure group, a special-interest group.” Unlike the private sector, governments usually have no real competitors for the services they provide. Short of moving from the city, taxpayers cannot take their business elsewhere. When labor exercises its traditional right to withhold its labor, the public, unlike the private sector, cannot exercise its traditional right to withhold its business.
Asked if he thought his executive order was a mistake, former Mayor Wagner said, “No. Just like anyone else, these people have a right to bargain collectively.” But, of course, everyone does not have that right. Welfare recipients don’t. Unemployed youths don’t. Taxpayers don’t have recourse to binding arbitration if dissatisfied with a tax hike. Later, Wagner added, “There’s no question it gave the unions muscle.… It was a significant decision; but I still say it was the right thing to do. If we didn’t do it, it would have happened eventually anyway.… Even with collective bargaining, we were able to hold down settlements.”
Wagner’s successors fared less well. After the fiscal crisis struck, Mayor Beame and the union leadership agreed they were “partners” in saving and running the city. At one of his first City Hall meetings in 1978, Mayor Koch told me early in his term, “The union leaders kept saying we were ‘partners’ and had to work together on everything. After a half-hour, I felt compelled to say, ‘Wait a minute. We share many of the same goals, but we’re not partners. You represent one hunded ninety thousand people. I represent seven and a half million. We don’t sit side by side at that desk.’ ”
The Growth of Pensions
Former Mayor Wagner vividly recalls a Loyalty Day parade in 1960. On March 23 of that year, Governor Nelson Rockefeller signed into law a bill increasing by 5 percent the state’s contribution to its employee pensions. The Mayor and Governor were, in Wagner’s words, “heading up the parade. The policemen and firemen were shouting as they went by, ‘Atta boy, Rocky!’ ” The Governor had become a hero to public employees, and the Mayor didn’t like it: “So I turned to Nelson and I said, ‘You son of a gun, taking all the credit.’ He just laughed.”
The bill Rockefeller signed appropriated few dollars. In the long run, however, it opened the door to other pension sweeteners and was the first salvo in a political competition between the city and state and its various unions, each seeking to outdo the other. For the first time, this legislation made pensions part of the collective bargaining process.
City politicians jumped in feet first. Following the state’s action, Beame,