In NY Labor ‘peace’ — through trickery

Labor ‘peace’ — through trickery

 Labor ‘peace’ — through trickery

‘Cooperation” and “problem-solving,” not “deadlock and “confrontation.”

That’s the contrast Mayor de Blasio makes between his approach to labor unions and Mayor Bloomberg’s. But as last week’s City Council hearing on city workers’ health-care “savings” made clear, what they’re cooperating on is tricking the public.

Remember last year, when de Blasio gave raises to teachers and other city workers, not only for the future, but for work they did five years ago? Those contracts will cost $13.6 billion over five years — and more than $3 billion a year after.

Not to worry: The mayor and unions agreed to cut $3.4 billion in worker health-care costs over four years, starting with $400 million this year.

How’s that going? City Hall labor chief Bob Linn told the council last week the results are “great news.” Good thing he’s a labor chief, not a doctor.

It turns out that 65 percent of the “savings” from this year’s rounds aren’t really savings in the sense of controlling health-care costs.

More than a quarter — $108 million — comes from auditors rooting out people (ex-spouses, for example) who weren’t legally supposed to be on the city’s health plan in the first place (maybe you got a divorce, but didn’t tell the city).

Only in union-beholden New York does the city catch union members stealing from the taxpayers — and reward them back the savings if they stop stealing!

Yes, people make honest mistakes. Still, people who got something they shouldn’t have should be happy not to repay some of that money.
Another big piece — $153 million — is from the unions agreeing to give the city money they have in their own separate fund to cover some mental-health costs.

That’s generous — except for city taxpayers put the money in the union fund in the first place.

And yes, the rest includes some real savings. But savings compared to what? When most of us think of cutting costs, we think: I spent $400 too much this month and I can’t afford it, so next month I’ll try not to spend that.

We don’t think: I spent $400 too much this month and I can’t afford it, so next month I’ll plan to spend $450 too much, and then “only” spend $425 too much instead.

But that’s what the city is doing.

Even with its planned savings, health-care costs for workers are still going up — they’re just going up by less than originally planned.
According to a presentation Comptroller Scott Stringer made in February, worker and retiree health-care costs will rise 31.6 percent over the next five years — from $5.2 billion this year to $6.8 billion in 2019.

Employee and retiree health insurance is still growing faster than anything else in the budget — twice as fast as salaries and wages. It’s just growing . . . less fast than it was supposed to.

And the unions have made sure: Heads they win, tails we lose.

What if health-care costs grow more slowly than expected because of national trends in drug prices or some-such? The unions can call that their “savings.”

What if costs grow faster than expected, for whatever reason? The unions could say those cost increases are beyond anyone’s control — and subtract their “savings” from a higher number.

Sounds outlandish. But that is why the unions and the city have chosen two separate consultants to project health-care costs. If everyone were going to agree on one figure, they’d only need one.

Yes, in a dispute, an independent party is supposed to rule — but that party may rule for the unions. The mayor has no control over it now.

The unions have a real incentive, as some “extra” savings go to them. Hmm. The early evidence is hardly inspiring.

So far, the unions have shown they’ll help contain costs — as long as they don’t have to give anything up. There’s a lot they could give up: Unlike virtually all private-sector workers, city workers pay no part of their own health-care premium.

The city even picks up the tab for a big part of retirees’ Medicare payments — one government paying for another government program.

Cutting Medicare payments in half and requiring workers to pay some health premiums could save nearly $800 million annually, the Independent Budget Office has been saying for years.

Instead, de Blasio is happy to watch health-care spending go up — and call it down.

Nicole Gelinas is a contributing editor to the Manhattan Institute’s City Journal.

Advertisements

Comments are closed.