December 21, 2005
New York City transit workers and CEOs
New York City transit workers have an average salary of $63,000 a year, can retire with full benefits at 55 (if they have 25 years of service), make no contributions for health care, and put away only 2% of their salary for pension benefits. It is not enough, apparently, and they was gone on strike, illegally, hamstringing New York City during the holiday shopping and tourist season. The workers are striking for guaranteed raises at about three times the inflation rate for the next three years. They have also demanded that they be able to retire at 50 and that disciplinary proceedings for poor driving be reduced by 25%. The workers ability to extract sure wages and benefits is, of course, not related to their skill and uniqueness as bus drivers, it is related to their ability to hold up others creating value. It reminds me of CEOs who claim that they are worth $30 million a year when the run a company. The CEOs are in a position to claim value, value not necessarily related to the value that they add. It is easy to confuse the arguments.
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