Labor board decides in favor of NJ Transit workers

For the second time in a row, a board set up by President Obama to fix NJ Transit’s long-simmering dispute with its workers has decided in favor of the workers, finding that the agency’s unionized rail employees should receive a large pay raise. The report, obtained by The Record, brings the agency one step closer to ending a labor dispute that has dragged on since 2011.

But it also creates a potentially perilous situation for NJ Transit, its workers and commuters. The dispute could end in a fare increase of nearly 30 percent, a labor shutdown that leaves 295,000 people without the trains they use every day, or both.

The Presidential Emergency Board decided that NJ Transit should give its unionized train workers an 18 percent pay raise over the next two years. That plus rising payments for employees’ health care would cost NJ Transit an additional $183 million between now and 2018, the agency told the federal board.

Such a contract is “not affordable,” NJ Transit said in its filings to the board, setting up the potential for a second fare increase in as many years. In 2015, NJ Transit hiked fares by 9 percent to cover a budget gap of $56 million. Paying the entire wage increase through fares would require a fare hike of 29 percent, if no other sources of revenue are found.

Such an increase would be politically unacceptable, NJ Transit told the federal board, and “would divert riders away” from NJ Transit.

For now, NJ Transit and its unions have a 60-day “cooling off” period, in which they may weigh their options. If neither side is willing to compromise, each is allowed under federal law to take radical measures. The unions may strike, or NJ Transit may lock out union members from its rail properties.

All of which could mean a shutdown of NJ Transit trains as early as March 12. That would leave 295,000 people a day looking for other means of transportation.

This is the second round of Presidential Emergency Boards that has decided in favor of the unions over NJ Transit. In both rounds the unions had asked for similar terms. They included a pay raise of about 18 percent over seven years, including back pay from 2011, when its current contract first was eligible for renegotiation, plus a modest increase in employees’ health insurance costs, tapping out at 2.5 percent of their base salaries.

NJ Transit’s offer was far more modest, with wage increases averaging about 1.25 percent annually, most or all of which would have been consumed by employees’ responsibility to pay up to 20 percent of their health insurance costs.

Source: North Jersey.com