Bucking the Unions and Looking for Cash

For the mayors of many U.S. cities in this hot summer, the threat of ghetto riots is less of a worry than a newer danger: bankruptcy. At the annual U.S. Conference of Mayors in Boston last week, San Francisco's Joseph Alioto warned some 350 anxious municipal chiefs, "The seeds of New York are in every American city." To prevent a bitter harvest, the mayors called for yet more federal aid to augment increasingly burdensome local taxes. They urged Congress to pass President Ford's proposal to share $39.8 billion in federal revenues with states and cities over the next six years. They also endorsed two Democratic antirecession measures. One would give $2 billion in federal aid to municipalities in which unemployment has exceeded 6% for three straight months; the other would shovel out $5 billion for public works.

But the mayors got no encouragement on these two measures from the Ford Administration. Housing and Urban Development Secretary Carla Hills and Transportation Secretary William Coleman told them to look to their own municipal resources. Said Hills: "The crisis of the cities will not be solved by making their deficits part of a rapidly growing federal budget deficit." Later, about 120 mayors met in the White House with Ford, who thanked them for supporting revenue sharing but did not mention their other demands.

The mayors had no more success in finding ways to deal with what some of them called a ticking time bomb: the growing power and aggressiveness of government workers' unions. Some have the power both to paralyze cities and to block the re-election of any local officials who dare to defy them. The U.S. now has some 12 million state and municipal employees--double the number in 1960--and about one-third belong to unions. The largest general public-employee union, the American Federation of State, County and Municipal Employees (AFSCME), has 700,000 members, from accountants to zookeepers, and the total is growing by 1,000 a week.

Busting Budgets. The unions have won spectacular wage gains in recent years. Among the higher top-base annual salaries, which are reached after varying years of service and without promotion: $18,000 for firemen and policemen in Chicago, $16,681 for teachers in Detroit with only a bachelor's degree, and $15,731 for sanitation men in New York. Naturally, people who earn promotions get more than that. Unions have also won pensions that range from generous to excessive and threaten to bust many a budget in the future. In New York, for example, sanitation men hired since 1973 can retire after 25 years of work, at age 55, on annual pensions of $8,448; teachers who now earn up to $16,650 annually if they have only a bachelor's degree can leave after 20 years' service, at age 55, at half pay.

Trapped between public demands for services and union threats to strike, many mayors are under severe pressure to capitulate to cries for ever inflating wages and fringes. Only seven states permit some strikes by government workers, but the workers increasingly ignore bans in other states. Their unions staged 380 strikes last year--and only 15 in 1958. In the aftermath of the recession, the number may increase this year as impecunious cities try to restrain wages or reduce work forces. Declared Seattle Mayor Wes Uhlman: "The issue is who is going to manage the cities--the mayor or the city employees?"

On every mayor's mind was the sad example of New York, where Mayor Abraham Beame had approached the current fiscal year with a budget gap that , he calculated at $641 million. The city made up part of the deficit by tax increases. Beame hopes to eliminate the rest by layoffs that are expected to total 20,000 employees out of a work force of 338,000. But the unions will hardly tolerate that. Two weeks ago, for example, Beame dismissed nearly 3,000 of the city's 10,600 sanitation men. After a wildcat strike, they were rehired, at least temporarily (TIME, July 14). Observed the New York Times: "New York is working for its unionized civil service workers, not vice versa. The real power in the city is held by the municipal unions."

Last week, Beame tried to get more work out of 100,000 city office and hospital workers by ending the tradition of shortening summer workdays by an hour. Outraged, Victor Gotbaum, the local AFSCME leader, said that he would seek to have the mayor's edict overturned through arbitration.

Across the country, other cities face the union squeeze:

> Cleveland got $9 million in federal funds, which saved it from having to cut 1,120 city employees to balance its budget. But a union representing 3,600 clerks and other city workers threatens to strike next week if the city does not sweeten its offer of a 100 hourly pay increase.

>Detroit already has laid off 2,000 of its employees and may have to dismiss hundreds more to erase a $17.6 million deficit. When the city asked 8,000 workers to forgo paid vacations and sick leave as an economy measure, said a shop steward, "We told them to shove it."

>Los Angeles also is locked in sweaty and secret bargaining with its unions. Said City Negotiator Eugene Kidder: "It's been a tough slog. This year they're flexing their muscles."

> Boston faces a $20 million departmental deficit, chiefly because of the cost of court-ordered school desegregation. Even so, to head off a labor confrontation, Mayor Kevin White last week agreed to give some 3,500 municipal employees an 8% wage increase.

On the brighter side of the ledger, some cities have managed to avoid trouble. Pittsburgh Mayor Pete Flaherty has pared the city's work force from 7,200 to 5,400 in five years, partly through attrition. St. Louis' 13,000 employees wisely decided to help the city out of its pinch by not pushing for wage increases this year.

Union leaders angrily deny that their demands are unreasonable. Thundered Jerry Wurf, the unyielding president of the AFSCME: "Public officials play a double-barreled game. They promise expansion of services and contraction of taxes. When they can't deliver, they make us the scapegoats." In fact, according to the Labor Department, union settlements in industry during the first quarter of this year have produced wage increases of about 12.5% while wage settlements in most cities have been averaging about half as much.

To avoid strikes or outrageous settlements in the future, both the unions and the municipalities might do well to agree on arbitration by high-level impartial boards. But to be effective, arbitration must be binding, which many mayors oppose. Argues Lawrence Cohen, mayor of St. Paul: "The ability of the municipality to pay seems to be the last item to be considered in binding arbitration. Some feel that the arbitration process is equal to flipping a coin." Unable to settle among themselves on the means to make peace without inflation, the mayors agreed last week only on a watery resolution opposing a bill pending in Congress that would extend collective-bargaining rights to all Government employees. But that only sidestepped the problem of strike threats, which could sour urban life for years.

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