Why are Philadelphia transit workers striking? The answer is simple, and the same reason that anyone ever strikes: they want a bigger piece of the pie. In 2005, the transit workers went on strike because they didn’t want to have to contribute to their health care plans; according to the Philadelphia Inquirer, the disagreement this time is over wage and pension increases. Simply put, the workers want more, more, more, and the management wants less, less, less.
The same is true of every industry, but the transit system suffers strikes and others do not for two reasons: 1) public support; 2) monopoly. Public support comes in the form of taxpayer funds that prop up SEPTA, the Philadelphia transit system. Monopoly is the overwhelming domination of the Philadelphia regional transit market by SEPTA. Public support and monopoly interact with each other to create problems like the 2005 and 2009 transit workers strikes. Let’s see how.
Public support means that SEPTA cannot go bankrupt. The reason is that it is subsidized. SEPTA only operates at a profit – if it operates at a profit at all – because the government is pouring money into its coffers. Because of this lifeline, SEPTA can always afford to be just a little more inefficient, provide a little less service to its passengers, a little more money to its workers. This last point is key: SEPTA workers, in strike negotiations, operate in a position of strength because they know that ultimately, SEPTA draws on an unlimited source of funds, the public purse. SEPTA workers can go on asking for more money until they own every penny in Pennsylvania. This is the meaning of public support: SEPTA can always afford a little bit more.
Monopoly means that SEPTA has the ability to inflict serious pain on Philadelphia. In its quest for the funds that public support entitles it to, it has a negotiating beatstick with the power of a nuclear bomb. If SEPTA goes on strike, to whom will Philadelphians turn in their quest to get from Point A to Point B? SEPTA performs an essential non-redundant service, which means that it can ask for any amount of money that it wants. If SEPTA is legally required to provide that service, this simply means that SEPTA management has to accomodate any demands that its employees make in order to keep it operational. Therefore, if SEPTA can ask for any amount of money that it wants, its employees can also ask for any amount of money that they want, as long as they threaten to strike.
The situation bears some resemblance to the recent debacle in the automobile industry. In both cases, workers possessed sufficient technical skill that they could not be rapidly replaced; add to this unionization, and the result was constantly escalating wages, benefits, and pensions. Unionization is not per se a bad thing, but sometimes, it can destroy its benefactors, the employers. A large part of the reason for Detroit’s decline is that its workers imposed a major competitive disadvantage on their companies by asking for too much compensation. In just the same way, SEPTA’s woes are in part because of the generous compensation packages that transit employees across the nation enjoy. The difference is that unlike the automobile industry, SEPTA has always been a ward of the state. SEPTA is on permanent government bailout; whenever financial conditions get to be too bad, it just goes back to the government for more money.
Citizens of Philadelphia, let them strike. Move to Jersey, and use PATCO. At least its farebox recovery ratio is better.
Posted by Catiline 
