Written by James Parrott, the Chief Economist at the Fiscal Policy Institute

For the first time in nearly five years, major labor agreements were recently reached covering public sector workers in New York City. On April 17, Transport Workers Union (TWU) Local 100 concluded a new 5-year contract dating from January 2012 covering 34,000 workers at the Metropolitan Transportation Authority (MTA), most of whom work for the subway and bus system in New York City. Two weeks later on May 1, the United Federation of Teachers (UFT) reached a 9-year agreement with the City of New York stretching back to November 2009 that affects over 100,000 public school teachers and support staff.

Both contracts represented a breakthrough in ending managements’ demands for a 3-year wage freeze that had grown out of a counter-productive post-Great Recession conservative infatuation with public sector austerity, or more precisely, a mindset that held that workers had to sacrifice to help clean up the economic mess caused by financial sector excesses.

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