The Pizza Principle

When I was 15, I got a job as a dishwasher at Filippi's Pizza.  I made minimum wage, and the work sucked.  Yet I still loved working, and I also loved one of the perks:  free pizza and pasta when working.  This principle, call it the pizza principle, applies at work everywhere.  It is understood that employees get discounts, and in some industries employees get freebies.  Everyone understands that.  Everyone, that is, except Governor Christie of New Jersey.

For at least the last 40 years, employees at PATCO, which operates the trains between New Jersey and Philadelphia, received a free train pass as part of their employment package.  And, about 15 years ago, employees were given a certain number of free bridge passes.  This is just the pizza principle applied to public transportation; virtually every train and bus system in the country gives this perk to its employees.

But then last summer a management employee making nearly $175,000 a year got caught giving a colleague's EZ-Pass toll to his daughter.  There was public outrage, and in response to that (plus intense criticism of the Delaware River Port Authority, PATCO's parent company, for lots of questionable spending) the DRPA revoked every employee's free train and bridge pass.  It's a classic management strategy -- someone at the top screws up and spending is out of control, so it gets taken out on the little guy.  Governor Christie explained that "members of the public don't get free passes, so why should the DRPA employees."

The Unions representing the affected employees took the case to arbitration, including a union I represent, Teamsters Local 676.  In a resounding rebuke to the DRPA, the arbitrator ruled that the DRPA had violated clear contract language, and also had violated a past practice between the parties.


The Arbitrator noted in the decision that "the Employer cannot walk away from its solemn obligations under the collectively bargained agreements.  The language of the agreements establishes, without reservation, that the Employer's action of not granting the benefits violated the terms of the agreements and well-established, well-utilized past practices."

The decision is well-written and reasoned, and the unions won based on basic contract law.  Governor Christie's obsession with government spending seems to apply only to working folks and people other htan himself.  It was obvious to anyone with even a hint of labor relations that what the DRPA did was wrong and unlawful.  Yet the parties had to spend thousands of dollars at arbitration, and the DRPA is going to have to spend thousands more to reimburse employees who had to pay for bridge and rail travel -- and this is a real dollar cost, unlike the free passes, which do not require any fiscal outlay.  More to the point, if the Governor had thought for more than a second about the pizza principle, the whole mess could have been avoided.

Blame the Unions

As the jobless recovery in this country continues, millionaires get tax breaks, and the income inequality is at its highest peak since the gilded age, it appears that we have finally figured out who the the culprit for our troubles:  Labor unions.  In one article this week, the New York Times reported that there is growing anger amongst the populace against public sector unions.  Another article outlined Republican politicians' strategy for curbing labor's influence by enacting legislation taking away the right to bargain, become "right to work" states, and even the right to strike. 

The gist of the articles is that public employee pensions and health benefits are bankrupting the state and local governments, which are faced with cutting those benefits or raising taxes.  One article claims that the taxpayers are unwilling to fund benefits that they themselves to not enjoy.  The other article shows how the Republicans are using this "outrage" to tey and enact laws that weaken unions.

It is true that some employees in the public sector have retained benefits that many more workers used to enjoy, including the grandaddy of them all: a defined benefit pension, in which an employee has guaranteed payments for life.  The DB pension has now been replaced by a 401(k), in which all the investment risk passes to the employee, leaving the employer completely off the hook.  Ask people who wanted to retire around the time of the last stock market crash which they would rather have.

Private sector workers have mostly accepted that they will not be getting a guaranteed pension, and are quickly coming to accept that employer-paid health insurance isn't guaranteed either.  What's interesting is that these workers are turning in anger and frustration not towards their employers, or corporate America, but towards public sector workers who have it better than they do, at least in retirement. 

In Jonathan Franzen's excellent new novel Freedom, one of the characters says that "the conservatives won.  They turned the Democrats into a center-right party....they especiallly won culturally...."  It's hard not to agree.  Since the PATCO strike of 1980, conservatives have largely succeeded in turning the cultural discourse away from class issues, and most perplexingly, turned people who should naturally be sympathetic towards unions (like blue collar workers) against them.  This isn't to absolve unions, who have brought many troubles upon themselves.

Instead of joining management in a race to the bottom, where competition in the market is based in part on how little workers can be paid, we should be focusing on how to bring everyone else up.  Certainly public sector unions and employees may need to have their expectations diminished somewhat. But by the same token, people should be asking themselves why they don't have pensions and health care -- and using public sector employees as a model rather than demonizing them.

Fanning public resentment over public employees serves some convervatives' goals of weakening unions and making sure no one has a guaranteed pension -- after all, some even want to privatize social security.  And while there is room for reform of public sector pensions and benefits, that doesn't mean we have to set workers in opposition to each other.