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Juan Gonzalez reports on the New York City Transit Strike; Union Fought Off City Attempts to Redo Pension Plan

StoryJanuary 06, 2006
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Last month, 33,000 New York City transit workers went on strike, shutting down the country’s largest public transportation system for the first time in 25 years. Pension plan demands were a central issue in the negotiations. Democracy Now! co-host Juan Gonzalez discusses the results of the negotiations and how they can impact workers nationwide. [includes rush transcript]

  • Juan Gonzalez, Democracy Now! co-host, New York Daily News columnist

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This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: In these last few minutes, Juan, I wanted to talk with you about the results of the New York City transit strike and the significance of the issue of pension that goes well beyond New York City in this largest transit system in the country and the workers in it.

JUAN GONZALEZ: Yeah, for a lot of workers now around the country, this is becoming a major issue. Just reported in The New York Times today on the front page that I.B.M., which runs one of the largest private pension systems in the country, it will stop participation by its employees or will not continue to contribute into its pension fund. It won’t eliminate the pension fund, but it’s basically phasing its pension fund out in favor of a defined contribution or a 401(k) plan for its employees. And across the country, we’re seeing local governments, as well as private companies, saying, 'We cannot deal with the escalating costs of these pension funds.' I’ve been doing a little bit of investigation over the past few weeks as a result of the transit strike and, by the way, the transit workers were able to stem the attempts to erode their pension system.

AMY GOODMAN: Do you think that it was a successful strike?

JUAN GONZALEZ: Oh, absolutely. It will prove to be one of the most successful defensive strikes of a union now in decades in this country. And they even got a refund from the pension fund. That’s going to be worth about $200 million to their members.

AMY GOODMAN: It’s also interesting that the head of the M.T.A., Peter Kalikow, has now said he never realized what an issue their pension demand, that the workers would have to go from giving 2% to 6% of their pay into their pension plan, would be such a lightning rod issue.

JUAN GONZALEZ: Right. Well, see, I think the big problem people don’t understand is these claims of runaway pension costs are bogus, I mean, as I’ve been investigating them. There’s no more worker benefit that can be more easily predicted for decades than a pension plan. You pay a certain amount of money, now, into a plan that will eventually be able to provide retirement 20-30 years down the line, so that it’s a totally predictable expense for any company or government.

What happened, throughout the 1980s and the 1990s with the stock market booming as it was, is that companies, as well as local governments, got used to not paying anything, practically, into pension funds. They reduced their contributions, because the returns from the market were doing so well. Then comes the crash of 2000, 2001 and '02, and suddenly, these companies now and governments are being forced to contribute more than they were in the last few years. But they got so used to not contributing virtually anything that they don't want to go back now to beginning to contribute 3% or 4% of an employee’s pay into a pension fund. So they’re basically trying to shift to the workers their failures in the past to properly fund these plans.

AMY GOODMAN: Juan, we only have a minute, but share your stats with us, this research that you’ve been doing, comparing what the New York City transit workers will get in pension compared to others.

JUAN GONZALEZ: Well, suffice to say that the New York City transit workers are costing the City of New York very little money, in terms of an annual contribution, compared to other parts of the city workforce, like the Police Department, the Fire Department. You’re talking about multitudes of 20 or 30 times more in costs for pensions around law enforcement or uniformed services than your average city worker or transit worker. And I’ll be doing more investigation on it over the next week or so, and hopefully will be able to get a more complete report here on Democracy Now! and in the Daily News very soon.

AMY GOODMAN: And in this 20 seconds we have left, in terms of the success of the strike, explain why you think this was a victory for Roger Toussaint and the Transport Workers Union?

JUAN GONZALEZ: Well, because they were up against a Republican mayor, a Republican governor and, in effect, if it went to the national level, a Republican president, and they were able to defend their standard of living, increase their pay. Yes, they had to end up paying a little bit more into health insurance, but they also got lifetime coverage for their members, who are retired, so they got an enhanced health insurance. So, they basically got a wage increase, they defended their pensions, they got a refund, and they got expanded health benefits. That’s kind of unheard of these days in a labor contract. And they got a contract on time, whereas most unions have to wait three or four years to negotiate a contract after it expires.

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