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John Petro

No, It’s Not the Labor Costs!

The NY Post ran and editorial today by Nicole Gelinas, called “It’s the Labor Costs,” that pins the blame of the MTA budget crisis on the backs of the MTA workers.

And nobody in Albany is talking about a vital part of the picture: Fixing the MTA's costs -- especially the runaway costs of pensions and other benefits not available in the rest of the economy anymore.

Here’s the truth: between 2003 and 2008, the MTA’s labor costs grew more slowly than ridership, meaning that although the MTA handled a 17 percent increase in riders, labor costs grew at only 16 percent (when adjusted for inflation). It’s as simple as that.

Gelinas goes on:

Together with health benefits, [pension] costs will rise by more than $600 million in 3½ years' time -- far more than the MTA will save from the service cuts that the agency's top people call "draconian" and "horrific."

Again, the MTA’s labor costs between 2009 and 2012 are projected to rise by about 10 percent, a reasonable number when the region and the MTA are both expected to continue to grow. A good deal of this growth is attributable to increases in health care costs. But the cost of health care isn’t something that is really under the MTA’s control. Health care costs for employers increased by 5 percent nationally in 2008. This represents a failure in federal policy towards health care, not a failure of the MTA.

The frustrating thing is that both Nicole Gelinas and the Drum Major Institute want the same thing: fast, efficient mass transit. I just wish we could all take a more objective look at the supposed “runaway costs” and put blame where it actually exists: the past and current leadership in Albany that has chronically underinvested in the MTA’s capital needs.

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Posted at 12:59 PM, Apr 02, 2009 in Labor | New York | Transporation | Urban Affairs
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