I recently listened to a year-old Gotham Gazette/Citizens Budget Commission podcast interview with NYC Labor Commissioner Robert Linn about the City-Municipal Unions contract round settled in 2014-15 and the most recent one.
As he spoke, it was clear that Linn was in a tricky bind. He was being pressed by his CBC interviewers about why the city was so generous in these negotiations. (Pardon me while I stifle a laugh.) Linn pushed back: the city wasn’t generous; it saved lots of money. It deferred retroactive payments for up to eight years to teachers, and denied some of that retroactive pay to teachers who left the city’s employ during that period. It made billions of dollars of cuts (“savings” he calls them) to the city’s health-care plan.
On the other hand, Linn didn’t want to make the same union leaders he has to continue to negotiate with look like dopes, or patsies. This is most clear in his explanation of the health plan, in which he claimed that, through “collaborative” discussions with unions, “better health care” was being provided—“a tremendous advantage.”
The interviewers eventually switched to the ongoing contract round and questioned Linn about the UFT’s parental leave: again, why was the city so generous? Linn pointed out that parental leave cost the city nothing—after Michael Mulgrew complained for months, the UFT agreed that Teachers would fund the whole benefit themselves by extending their contract by two-and-a-half months. That much is well-known, and was reported by The Chief, even if the CBC interviewers didn’t understand.
But then Linn discussed the actual mechanism for paying out the benefit and revealed something new: the city and the UFT agreed to organize the leave plan so that Teachers who use the leave are not paid by the city, but by the UFT Welfare Fund (which, in turn, is funded by the city).
That’s a completely different pay mechanism than other “leave”—sick time, vacation time, etc., where the employee remains on payroll. Why do it in this seemingly awkward way? This “secondary payment scheme” has favorable monetary implications for the city and potential costs for Teachers.
For the Teachers themselves, it reduces their pensionable earnings for that year(s). And that matters if that year might otherwise be one of the top three (for Tier 3/4) or top five (for Tier 6) earnings years. Especially for Tier 6, where those five “best” years have to be consecutive, the loss of six weeks of pensionable earnings could affect ultimate pension payouts to the tune of thousands of dollars.
Of course, that saves the city money in the long run: lower pension payouts. But even in the short-term, the city saves. By paying money to the Welfare Fund and not directly to Teachers, the city reduces its “payroll” cost, which means it also reduces its annual payment to NYCERS.
I assume that someone explained these implications to Michael Mulgrew, but it’s never been his style to tell his members how the sausage is made, or what’s in it.
On the podcast, Linn was careful not to say, “I got over on Mulgrew and 125,000 teachers.” That’s not his style. But that’s what happened.
Editor’s Note: Mr. Kagan, a former member of Transport Workers Union Local 100 and the United Federation of Teachers, is now a member of the Professional Staff Congress and a Ph.D. candidate at the CUNY Graduate Center History Department.
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