NYC Transit Strike

New York City residents are eagerly monitoring negotiations between the union representing the city's monopolist transit workers and the Metropolitan Transit Authority, the monopolist overseers pretending to play the role of "management." If no agreement is reached by Friday at 12:01 AM New York City will become an even more unnavigable metropolis as buses and subways grind to a halt. As always in union negotiations, money is the main issue with the monopolists making unreasonable demands. "Management" has offered a 5% raise over the next two years while the union has demanded 24% over the next three years. Evel Knievel couldn't bridge that chasm even if his parachute properly functioned unlike his Snake River Canyon attempt. So, despite New York's Taylor Law which effectively outlaws transit monopolists from striking, New Yorkers are warming up their legs and looking for places to sleep closer to their offices as the deadline nears.

A strike during the Advent Season (sorry, the phantasmagoria we now call "The Holiday Shopping Season") will wreak havoc on merchants who do a brisk business during this time as well as the city which grabs an 8.375% involuntary surcharge euphemistically known as a "sales tax." On the bright side, one can point to a slowdown in retail sales and the resultant starving of the municipal Moloch as one silver lining. Unfortunately for working New Yorkers, the transit strike will exact such a toll that Moloch's unsated appetite will be insufficient consolation. Yesterday the city estimated, in a submission to the court presiding over the "negotiations," that businesses stand to lose between $440 million and $660 million per day. Furthermore, the city will incur approximately $10 million per day in additional expenses for police and emergency services personnel to herd New York's transportation-less, bovine pedestrians.

Tears are hard to shed for the impoverished transportation lords. At present, monopolist NYC Transit train operators have a starting salary of $52,644. Police officers and firefighters currently start at $25,100 while sanitation workers start at $26,000. Although all these positions employ unionized monopolists, one has to wonder why it is that police officers and firefighters, who lay their lives on the line daily, start at less than half the wage of a subway driver. Also perplexing is the fact that sanitation workers get more than New York's Finest and Bravest. However, in the global headquarters of monopolies, unions, and government job spoils systems, the Big Apple, perhaps nothing should surprise us and, to be blunt, highlighting the difference might only serve to enrage those earning less while incurring far greater risks. Sadly, in the end it will only be the overburdened New York taxpayers who foot the difference to raise the salaries of the police and firemen.

Those of us who take a historical look at the New York City transit system's predicament can only feel exasperated. After taking over the subway system from private operators in the mid twentieth century, New York City then proceeded to do everything in its power to maintain the "nickel fare" despite inflation, the increasing bargaining and extortionate powers of the municipal unions, and a deteriorating infrastructure. As the fare rose from a nickel to the current $2, the MTA, with the help of the city, enforced its monopolist's grip on the local transportation market. For years the city prohibited private operators from running commuter van services, falsely claiming that the vans were dangerous and accusing drivers of cherry picking the "best passengers" (???) from the monopoly's routes. Unmentioned was the fact that the vans, largely found in immigrant and working class outer borough neighborhoods provided cheaper, faster and more reliable transportation than the monopolist's subways and buses. In a feeble concession to the free market, the monopolists finally agreed to allow the vans to operate but only after compliance with burdensome inspection and driver qualification regulations. Consumers voting with their feet rarely matter to monopolists and, in New York City's case, the result was merely an increase in the transit fare to make up the revenue shortfall, as the quality of service never entered the equation.

One can only stare in disbelief at the inefficiency of the city's transportation system. In last November's elections legislators called for, and unfortunately received, billions of dollars to extend the Second Avenue subway line. This line presently exists as an empty, unused subway tunnel. With the recent funding mandate, a newly christened make-work project will extend the dormant tunnel another 50 blocks south over the next decade. Despite its astronomical cost, the city and the transit monopolists never entertained any free market solutions like expanded private van service to fill the need. Even in Brazil, where skeptics boast "It's the country of the future…and always will be!" a saner element rules in the transportation market. Residents of Rio de Janeiro who live in the hillside shantytowns known as favelas make frequent use of private van service to commute into the downtown area. For less than the cost of the public bus system, Rio's poorest residents ride around in the city in so many Volkswagen Minibuses that visitors think they are witnessing a restaging of Woodstock. And since the favelas are commonly built on the Rio's steepest hillsides, private operators with motorcycles ferry pedestrians up and down the hill for the hardest leg of their trips. The remarkable thing is that all this transpires without some meddling government bureaucrat orchestrating it and that it happens in a country with an avowedly socialist President. I would suggest that New York City's Politburo take note but I fear it would only assist them in crushing any free market entrepreneurs.

Of course, Mayor Michael Bloomberg and his minions are diligently preparing for the strike with noxious government stopgap measures. Despite creating a net worth in the billions of dollars by successfully navigating our nominally free market in media, Bloomberg persists in socialist solutions to the upcoming headache. To cut down on congestion, the city will not allow any cars with fewer than four passengers south of 96th Street in Manhattan during the strike. A better solution might be to allow anyone who wants to drive a car to do so with however many passengers he wants while charging premium fares to those hauling fewer passengers. In this manner, those who most value the use of their private car will pay for the privilege while those who do not see the same value on their time can hoof it. None of these actions by the city should surprise us as New York assiduously outlaws ticket scalping and maintains rent regulations which even the most redistributionist of economists deplore. As a final solution Bloomberg has recommended that commuters find a place close to the office to camp out during the strike. Since the Mayor opts not to occupy the city's official mayoral residence at Gracie Mansion it will only be a matter of time before he offers that up for commuters with no means of getting home. Bet your last dollar that any such offer will not be properly auctioned off to the highest bidder as that would make too much economic sense.

Cynical observers of Friday's potential nightmare might hope for two outcomes. First, since the time necessary to train someone to drive a bus, sweep a subway car, or make change in a token booth is not significant, a replay of Reagan's bust up of the Patco strike would most likely be feasible in theory. In reality, New York is so heavily unionized that such a scenario would probably lead to widespread rioting. Plus, the nominally Republican plutocrat Mayor would be unlikely to challenge such a large part of the city's voter base, unionized workers, after spending a mind boggling $73 million on his campaign, or $103 per vote, in the November election. Alternatively, New Yorkers could vote with their feet (they might be using them Friday whether they want to or not) and demand more private sector transportation options. While this avenue is equally unlikely as the city's largest single interest group – New York City residents being horribly inconvenienced by the transit strike – is more diffuse and unorganized than the union whose machinations seem almost Prussian in their threatening precision. I guess those of us who like to hedge our bets will just hope for good weather as the only good possible outcome.


December 15, 2005