Mayor Bloomberg and Governor Paterson have both threatened public employee layoffs. The purported goal is to induce public employee unions to agree to smaller and more widely dispersed sacrifices among all their members, in order to avoid the greater pain of layoffs for some of them. This, for those who haven’t been in a public agency or public employee union, and/or haven’t been paying attention for the past 25 years, is a farce, because when there isn’t enough money unions prefer layoffs to any other alternative. As their top priority, the unions look out for number one — the people who work for the unions. Next up are the retired and those about to retire, followed by the least motivated workers, who often require union hearing and grievance services. Those who just do their jobs and have the city and state ship part of their paycheck to their “representatives” don’t count for much, and those not yet hired count for nothing (thus all those “screw the newbie flee to Florida” contracts). But those who are laid off count for less than nothing, since once they are gone they can’t vote in union elections. So who cares? The unions only have to pretend to care until they are gone, and by threatening layoffs, the Mayor and Governor merely invite ritualistic shadow play while engaging in some of their own.
Now it doesn’t have to work that way. For example, faced with a fiscal crisis and the possibility of layoffs, many rank and file Orange County social workers have said they were willing to take furloughs to save their co-workers jobs, or so I have read. In the end, however, I expect layoffs not furloughs will happen there, because workers with seniority are almost always unwilling to go along with a reduction in their pay. That is what happened at the Department of City Planning in the early 1990s. Meanwhile in all of California, the public employee unions are suing to prevent the Governor from furloughing workers two days per month in lieu of layoffs. They would prefer the layoffs. "All for one, one for all" unionism is evidently something that existed some time before I was born, or at least before I grew up. Those of us growing up in the multi-tier contract era have no concept of it.
So why the shadow play? Why “threaten” the unions with something that is not a real threat? The Mayor, the Governor and the unions all expect to deliver declining services for increased taxes, and they are looking for a way to point fingers in a circle so no one can agree on who is responsible. The unions want to be able to blame the layoffs for the decline in public services, and pretend they were opposed and have the best interests of service recipients at heart. Kind of like Exxon has the best interests of gasoline buyers at heart. The Mayor and Governor might want to blame the unions.
The decline in public services is likely to be severe. In non-policy agencies*, where public services are directly provided, those services provided generally decrease by a multiple of any budget reductions. This is due, in part, to the fact that unfunded pension liabilities, retiree health care, and debt, which produce no services, grab the first dollars, while the budget cuts only affect those on the job. And among those on the job, in many cases seniority determines the job they do, so the newest employees do far more work than those with more experience. The impact of layoffs not only hits work in general, relative to non-work, but also could hit one particular aspect of work harder, depending on where those with the least seniority are posted. The government can attempt to back-fill with workers from elsewhere, but the result can be someone in a position where they don’t know what they are doing.
Private sector companies, in contrast, either choose to lay off the least productive employees, or at least distribute the layoffs to minimize the impact on any necessary work. They don’t fire all Indians and no expensive Chiefs; some of the Chiefs are also let go. When private companies lay off, moreover, it is usually because sales are down, and thus there is less work to do. Those laid off would otherwise have been sitting around doing little or nothing useful. In government, in contrast, the demand for public services and benefits generally rises in recessions, even as the budget is being cut. So the idea that government can “right size” but cutting in a recession, as many businesses are being forced to do as sales decrease, is a fallacy.
Could a veteran teacher who spent 20 years maneuvering to get an out-of-classroom slot, or a police officer who spent 15 years angling to get stationed at the precinct, be sent back to middle school or patrol? Perhaps, but the level of effort is likely to be less than what one would have gotten from the person laid off, based on their relative expectation of what is “fair.”
The bottom line while in the private sector they increase productivity by getting rid people who aren’t doing much, in the public sector the people who aren’t doing much are precisely those who cannot be laid off. Sometimes cutbacks induce the remaining private sector workers to try to do a better job to stay employed; in the public sector layoffs just reduce morale.
Layoffs do a lot of harm to recipients of public services. Lots of harm to recipients of public services increases the relative quality of life of those who don’t rely on those services, because they live in the suburbs and/or don’t rely on public schools, transit, health care, etc., compared with those who do. Most NYC public employees are insulated from some, if not all, NYC public services. So layoffs and declining services make them relatively better off.
If the Governor and Mayor really wanted to make the unions nervous, they would threaten to have actuaries go over all the contracts since the 1960s, and figure out how much — in wages and non-wage benefits — each generation of union members has grabbed for itself, and how much has been left for those who came after. And send the report to every member of every union, with the suggestion that perhaps it is the retired and near retired who took too much and ought to be giving something back. But they won’t.
The “threats” to reduce wages and benefits for new hires, and lay recent hires off, are not threats at all. Anyone who thinks they are is a babe in the woods. Bad enough if Bloomberg and Paterson are playing us for idiots by engaging in the layoff threat shadow play. Worse if they are babes in the woods themselves.
* In policy agencies, based on my experience, it is those with the most seniority, managers in particular, who get the privilege of actually doing most of the work.