BART Strike is a Teachable Moment

Reactions from the press and public to the BART strikes this year have been overwhelmingly negative. In one of the safest Democratic strongholds in the U.S., there is serious talk of outlawing future BART strikes.

As reported in the San Francisco Chronicle on October 19th, “That discussion has already begun, in letters from California lawmakers to Gov. Jerry Brown, from state Sen. Mark DeSaulnier, D-Concord, who said he “looking into legislation that could prevent future strikes,” a petition drive by a Democratic Assembly candidate in the East Bay seeking the same, and a piece by editorial page editor John Diaz in Sunday’s Chronicle supporting a Republican proposal that BART unions be made to honor the no-strike clause in their last contract.”

The aforementioned Democratic Assembly candidate is Steve Glazer, a “political strategist, longtime adviser to Gov. Jerry Brown and, most recently, city councilman in the prosperous East Bay suburb of Orinda.” In an October 15th article in the San Francisco Chronicle, Glazer described himself as “a progressive Democrat who is fiscally conservative – supportive of public-pension reform and more business-friendly regulations, and willing to take on labor, the biggest special interest in the state.” Glazer, reportedly among the top money-raisers statewide so far for next year’s Assembly races, went on to say that “Not one drop,” of his campaign contributions have come from labor. “I’m redefining what it means to be a Democrat,” Glazer said.

By apparently recognizing that fiscal conservative values require taking on unions like those representing BART workers, Glazer is on to something. But how far will he take it?

When questioning the right of BART workers to strike, the underlying principle is that workers who hold monopoly power over a vital public service cannot be permitted to withhold that service, holding members of the public hostage, in order to extract concessions from management. This ability has served BART well over the years. Here, taken from information provided to the California State Controller from their “Raw Export” page (refer to “2011 Special District Data), with analysis from the California Public Policy Center available to download in an Excel spreadsheet, is how much the average full-time BART worker made in 2011:

BART-average-pay-2011-aThis is only part of the compensation, however. Here, taken from a BART employment brochure, are the benefits offered BART employees:

BART-average-benefits-a

Nice work if you can find it. How many veteran workers get six weeks paid vacation per year, plus 14 paid holidays, a generous pension (“2% at 55 equates to a retirement benefit at least three times better than Social Security) that costs them nothing, and health and dental coverage with an average value of $15,885 per year, for $92 per month? Plus long-term disability insurance, life insurance, and a host of other benefits including unlimited free rides on BART?

If BART were a self-supporting, non-monopolistic entity, providing its unionized workforce with this sort of largesse would be a private matter between the employees and their management. But if you review BART’s 2013 Budget, you will see that of the $672 million of total revenues expected in 2013, only $415 million comes from operating revenue – passenger fares, parking fees, etc. The other $257 million comes from taxpayers, mostly through sales taxes. BART’s biggest 2013 expense, by far, is the $381 million they have budgeted for labor.

Which brings us to a teachable moment.

BART’s compensation relies partially on the ability of its workers to strike. But unionized public sector workers, who have only limited ability to strike, still benefit from binding arbitration rules, as well as major advantages that BART’s unions do not have – they elect their management. California’s public sector unions collect and spend over $1.0 billion per year, with about one-third of that (a staggering amount) going to explicitly political activity, but nearly all of it used to advance a political agenda – how we manage our public agencies.

The financial consequences of the ability of public sector unions to decisively influence the election of politicians they negotiate with should be obvious by now, especially to “fiscal conservatives,” regardless of their party. Here are a few examples of the average total compensation – direct pay plus employer paid benefits – for California’s city workers:  San Jose – $149,907, Anaheim – $146,551, Costa Mesa – $146,863, Irvine – $143,691. And here is a study showing California’s total state and local government debt, when you include the present value of unfunded liabilities for pensions and retirement health care at realistic rates of return, to exceed $1.0 trillion.

What politicians and voters need to understand is that public sector unions wield leverage even more potent than BART’s unions. This leverage has resulted in an overpaid public sector workforce and potentially catastrophic levels of state and local government debt.

So what will fiscally conservative Democrats do? What will voters do?

It is healthy to appreciate the contributions made by our public servants. But to pay public servants literally two to three times as much as the average private sector worker is to invert the relationship. Public servants have no right to exempt themselves from the economic challenges facing private sector workers. Until public sector workers cannot inordinately influence our politicians, and until public sector workers earn taxpayer funded benefits according to the same formulas and incentives as private sector workers, the challenge of achieving a financially sustainable government will have no chance of success.

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Ed Ring is the executive director of the California Public Policy Center.

4 replies
  1. Ron Myers says:

    It’s stunning to see a “conservative democrat. At one time in the not so distant past, there were many who would vote with conservatives on fiscal issues and with democrats on social issues. The country was able to be fairly run. Then the uber left ” progressive” bomb throwers of the democrat party took over and this segment of the party has been banished to the hinterlands or were defeated, with the help of unions in subsequent elections. Now, we are a mess. I admire Mr. Glazer for his stand, but at the same time, I’m very dubious about his ability to withstand the tremendous pressure that will be placed upon him by the SEIU and Teachers unions. The unions own and run most cities in California as well as the state legislature. It would be nice to have a few republicans and rational democrats back into the senate! Good luck, Mr Glazer. I wish you the best!

  2. Tough Love says:

    Ed, One of the standard Union ploys whenever a giveback is asked for (or in the rare instances when the Unions agrees to it) is to play up the percentage reduction in pay or alternatively, the percentage increase in a cost to them. As an example, I recall the Union outrage and screaming at a 60% increase in a General Practitioner copay cost. Well, digging in to the details, I found that the cost went from $3 to $5. Yup, that was indeed a 60% increase, but who in the Private Sector has insurance with copays anywhere near these extremely low levels ?

    Taxpayers need to DISMISS the constant Union/worker BS and all Public Sector pay, pension, and benefits should ONLY be compared to what the typical PRIVATE Sector workers gets.

    And taking that a step further, there is a budgeting approach called zero-based-budgeting whereupon the setting of the new year’s budget does NOT start with last years budget, adjusted for changes, but starts at “zero” and examines the need for each person and each expense. THAT’s the approach Taxpayers should demand for examining Public Sector cash pay, pensions, and benefits. And, the primary comparison should be … WHAT does the comparable PRIVATE Sector worker get, not what ANOTHER over-compensated Public Sector entity pays.

  3. Dennis says:

    Seems like candidate Glaser is using this opportunity to appeal to those commuter voters and private businesses who suffered during the BART strike. Is this just campaign rhetoric or is he truly sincere? Calling himself a Democrat, and fiscally conservative is a contradiction. Democrats have always been lavish spenders, particularly in Commiefornia, and have used public employee unions to shore up and promote the Democratic vote.
    My wife rode daily to work on BART until the strike, and has now decided she will never ride BART again after reading about the union employees demand for more lavish pensions, health benefits, and salaries at the expense of taxpayers. I will never ride BART again. I rode BART in the early 70s when it finally opened up after so many construction and financial delays. After 40 years, BART still uses the same cars. The seats and flooring are dirty. The air inside the cars is stagnant and smelly. And these unions have the nerve to demand more benefits from commuters and taxpayer? BART union employees should have been told to return to work immediately or face dismissal with no chance of rehiring, just like Reagan did when he ordered the air traffic controllers to return to work or face dismissal in the 1980s. Public employees are hired to serve the public; not to entitle themselves to extracting wealth from commuters and taxpayers.

  4. Editor says:

    Dennis,

    Not mentioned in this article is the 37.5 hour workweek, or the reportedly rampant practice of coordinating paid “sick” days so people can work overtime on those extra shifts. And now that the strike is over, preliminary news is that the workers will get a net increase to their total compensation of 13%, which translates to over $40 million per year.

    You are right to be fed up with BART, the management who caved and the unions who just can’t get enough. But I would reserve judgement on any Democrat who aspires to be a fiscal conservative. It is not necessarily an oxymoron.

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