The Deeper Issue at BART

The latest BART strike is now running into its second week and the Bay Area is frustrated.  Supporters of BART’s unions are clearly in the minority and the press has focused on what many perceive to be outsized worker salaries, pensions and other benefits.

The reality, however, is that BART’s unions are less effective than advertised in pushing up the wages of most of its workers.  Their impact on the overall service is negative, but in ways that go beyond salaries and receive less public attention. 

BART Pay vs. Peers

Some media outlets have published analyses showing that BART employees earn more money on average than those in other public agencies.  Without controlling for different mixes of jobs across organizations, however, calculations like these are useless. 

A better analysis by the San Francisco Chronicle compares wage rates in specific job categories.  It shows that BART’s train operators and station agents make virtually the same amount as train operators at peer transit agencies.  BART mechanics earn more than some of their peers but less than their local counterparts at VTA and Muni. 

BART workers are not alone in their lack of contributions to their pension plans or in their relatively small contributions to health care plans.  Moreover, unlike employees in many other organizations, BART employees won’t be eligible for Social Security benefits.  

When everything is taken into account, BART’s salaries don’t seem all that special - at least relative to other public-sector, unionized peers in pricey metro areas.  

BART Pay vs. the Private Sector

But how do they compare to the private sector?  The Chronicle has also reported that BART custodial employees are paid considerably more than similar private sector workers.  Job openings at BART in some categories are coveted and often involve a deluge of applications.

As one moves up the economic chain, however, the wage gap compared to the private sector begins to fade, despite the fact that most of BART’s white collar employees are also unionized.  At the top end, BART’s CEO earns considerably less than her private sector counterparts.

So, does this mean that BART’s unions are effective in creating wage premiums for their lower-income, blue collar workers?  Not necessarily.

Compensation in the public sector is much flatter than in the private sector. BART’s CEO makes about 10 times more than the lowest paid full-time employees, while in the private sector the multiple is usually in the hundreds.  As the Economist magazine argues, public employees in the U.S. are arguably both overpaid and underpaid.

In short, wage premiums for low skilled workers at BART may have less to do with unions and more to do with the compensation culture in the public sector. 

Negotiation Theatre

Neither party, though, in the ongoing dispute has an incentive to suggest anything other than that BART’s unions are powerful wage-spikers.  The unions need their members to believe that their considerable dues have a payoff.  Meanwhile, BART management’s leverage depends on the image of workers as grossly overpaid. 

Sky-high demands by unions at the start of contract negotiations force a stingy response from BART management who know that the final deal will inevitably fall somewhere in the middle. 

The fact that the terms of labor contracts end up being different from management’s initial offer allows unions to claim that they are responsible for the increment.  Employees don’t understand that in the absence of all this theatre, and without union representation, they might actually earn about the same amount.

The Main Impact of BART’s Unions

BART’s unions are more rightly viewed instruments for self-enrichment rather than as instruments for employee enrichment. 

They are hostile to new labor saving technologies, even if current employees are protected from job loss.  Consequently, internal discussions of concepts like full train automation are required to be clandestine at BART.  The union goal is to guard its turf by making sure that work stays labor intensive in order to maintain the number of dues-paying represented workers. 

BART’s unions also uphold a raft of inflexible work rules that go well beyond protecting worker safety.  These rules limit the way that managers can schedule employees and often result in a greater number of workers than would otherwise be necessary.  The union goal is to prevent a direct management-to-employee relationship and, again, to maintain or expand the number of represented employees.    

BART’s unions are hostile to pay differentiation.  Merit pay acknowledges that worker quality varies and suggests a direct relationship between employer and employees.  This is a threat to unions whose position depends on being the being the main arbiter of employee compensation.

The closed-shop, unionized, collective bargaining framework of BART greatly hampers the ability of the agency to run its service efficiently and cost-effectively.  It also creates a culture where innovation is suspect and where there are too few incentives for quality work.   

Cut Out the Middle Man

At present, some members of the public reflexively support public sector labor unions like BART’s out of a fealty to unions in general.  At the same time, others reflexively denigrate public employees out of a frustration with the scope of government.

We need a different formulation.  We need to respect public employees while simultaneously insisting that public services exist for the public and not special interests.   

We need to treat public employees like BART’s as individuals and not bargaining “units” as if they were cogs on some 19th century factor floor.  There is considerable variation in employee quality, even among blue-collar workers at BART.  We need to recognize that fact.  We need to give those who manage BART more freedom to innovate, to set work rules, to fairly compensate good employees and to get rid of the bad.

In the cast of transit, we need the federal government to abandon provisions that mandate collective bargaining for transit systems.  This will allow willing state and local governments to run transit services for the good of the public.