Public Employee Press

City unions grapple with health, pension challenges

As municipal labor leaders met Jan. 26, Mayor Michael Bloomberg presented his $52.2 billion budget proposal for the year beginning July 1.

The mayor announced that he wanted to work with the city employee unions to reduce the city’s burden of health care and pension costs and called on employees to agree for the first time to contribute toward their basic health care plan.

In addition, he called for a revised pension plan, similar to a 401(k), for future employees.

Health care, pension and budget issues were also the focus of the Municipal Labor Committee’s annual conference. The conference was held at the headquarters of the United Federation of Teachers. UFT President Randi Weingarten chairs the umbrella group, and DC 37 Executive Director Lillian Roberts serves as the secretary of the MLC.

At the conference, Roberts encouraged the city’s municipal union leaders to support DC 37’s new campaign for a national health care system and price controls on prescription drugs.

National health care pressed
“We will be taking cards signed by our members demanding universal health care and drug price controls to Washington, and we hope all of you will join us in this campaign,” Roberts said. The conference included a panel on health care that discussed the need for a national health care system and the importance of the AFL-CIO’s nationwide campaign to pressure businesses like Wal-Mart to provide decent coverage for their employees.

Panelist Dr. Oliver Fein, chair of the New York Metro Chapter of Physicians for a National Health Program, said market-based reforms had failed to address the health care needs of the country.
He noted that 45 million people lack health insurance and the United States spends $5,000 per individual on health care, the highest in the world.

“The time has come for national health care,” he said, to applause.

Economic outlook
A panel in the morning dealt with the city’s four-year economic outlook. Comptroller William C. Thompson Jr. warned municipal leaders about the growing pressure on municipalities to replace traditional pensions that guarantee workers a retirement income based upon their years of service and salary with 401(k)-like defined contribution plans, which require account holders to manage their own funds and don’t provide for a guaranteed retirement income.

Thompson noted that the city’s pension obligations constitute 7.5 percent of today’s budget, down from 8.5 percent 20 years ago.

Labor Commissioner James F. Hanley said the city must rein in its escalating health care and pension costs. He noted that the city faced a 60 percent increase over five years of the basic rate for its health program and that pension obligations had increased 61 percent from 2000 to 2005.

During an afternoon panel on the budget, James Parrot, deputy director and chief economist of the Fiscal Policy Institute, said New York now has the greatest income inequality in the country. Twenty years ago, New York ranked 11th in income polarization.

Allen Brawer, managing partner of the Policy Research Group, suggested that Bloomberg’s pressure for employee contributions to health costs could poison labor relations and suggested that some unions may choose to wait out his term before signing new contracts.

Wrapping up the conference, Weingarten noted the irony that as Bloomberg supported improved health care for children, he at the same time sought to reduce benefits for city employees, the parents of many of the same children.