Privatizing MARTA jobs no cure-all for costs; federal law ensures union will endure even with private vendors

By David Pendered

At least one significant point is lacking from the general conversation about “privatizing MARTA” as a way to maintain transit service while reducing its cost.

MARTA predecessor, Atlanta Transit Co., operated this type of bus in the 1950s

Drivers who steered this type of bus for MARTA’s predecessor, Atlanta Transit Co., were unionized in the 1950s and that union legacy continues under federal law at MARTA and any private company it may hire to provide drivers. Credit: motorbussociety.org

The point is a labor agreement between MARTA and the Amalgamated Transit Union, Local No. 732. The union represents 64 percent of MARTA’s staff, which is larger than 4,500 workers, according to the recent management audit by KPMG.

Even if some or all of these jobs were privatized, federal law requires that existing rights and benefits of union jobs continue into jobs created by any private companies hired by MARTA. The notion that labor negotiations – and the higher personnel costs that the audit suggests stem from collective bargaining – would dissipate in a scenario of out-sourced jobs simply isn’t accurate.

“To privatize a significant number of bargaining unit jobs is an easy thing to talk about,” said Michael Walls, a labor attorney and former chairman of MARTA’s board of directors. “The actual doing of it is a very difficult thing to do.”

It’s difficult because of section 13(c) of the Federal Transit Act. This federal law applies to MARTA because MARTA used federal funds in 1972 when it paid $13 million for the old Atlanta Transit Co., which recognized the transit union.

Section 13(c) obligates any private employer hired by MARTA to continue collective bargaining rights. If negotiations break down, employees would have the right to strike – a right they do not have when they work for a public entity such as MARTA.

Specifically, the labor rights set out in the state law that creates MARTA would not apply to a private employer. Instead, labor relations with a private employer would be set out under the National Labor Relations Act, under which employees have a right to strike if the parties bargain to impasse.

MARTA audit

MARTA has released a draft version of its management audit by KPMG.

MARTA’s transit union is covered under the Federal Transit Act because it was a recognized union when MARTA purchased the city’s previous transit system.

According to historical records at Georgia State University, the city’s first transit system was run by an ancestor of Georgia Power, which recognized the transit union in 1918. Georgia Power couldn’t make a profit on the transit system, and in 1950 its drivers went on a five-week strike. The power company looked for buyers and quickly sold to the ATC, which recognized the union and ran the transit system until it sold to MARTA.

The union came to MARTA with the deal. The same phenomenon occurred in Savannah, where the public transit system also acquired a union when it used federal funds to buy an existing transit system.

The way MARTA, and its vendors, can end its negotiations with the union is for MARTA to stop accepting federal funds.

According to a synopsis on the Labor Department’s website:

“Under Section 13(c) of the Federal Transit Act, an employer who receives federal mass transit funds must protect all covered mass transit employees affected by the use of federal money. The U.S. Department of Labor (DoL) must approve the arrangements made to protect these employees. For covered employees, these arrangements include:

  • “Preserving their rights and benefits;
  • “Continuing their collective bargaining rights;
  • “Protecting them against a worsening of their employment conditions;
  • “Assuring jobs for employees of acquired mass transit system;
  • “Providing priority of reemployment if the employee is laid off or his job is eliminated; and
  • “Provide paid training.”

Click here to read more from the Department of Labor.

The KPMG audit makes one reference to the federal law, on page 38 of the 114-page document:

  • “Section 13C of Federal Transit Law offers certain protection to transit employees affected by Federal transit funding.”

KPMG looked at labor costs for savings because labor, along with fuel, comprises MARTA’s largest expenditures.

About 77 percent of MARTA’s operating budget goes to cover personnel costs that tally $345 million a year, according to the audit.

The audit does not parse out by the type of job (i.e., union or non-union) the amount of potential savings that could be achieved by privatizing jobs and reducing benefits. The figures cited in the audit are substantial:

  • Up to $50 million a year in legacy pension plans, healthcare, retirement, absentee and workers compensation;
  • From $60 million to $142 million over five years by outsourcing jobs that are deemed non-core to MARTA’s mission.

Click here to read the complete draft audit by KPMG.

 

David Pendered, Managing Editor, is an Atlanta journalist with more than 30 years experience reporting on the region’s urban affairs, from Atlanta City Hall to the state Capitol. Since 2008, he has written for print and digital publications, and advised on media and governmental affairs. Previously, he spent more than 26 years with The Atlanta Journal-Constitution and won awards for his coverage of schools and urban development. David graduated from North Carolina State University and was a Western Knight Center Fellow. David was born in Pennsylvania, grew up in North Carolina and is married to a fifth-generation Atlantan.

7 replies
  1. LJ says:

    It is not like MARTA’s unionized employees are making a bundle. The top wage rate for bus operators at $19.54 ranks 132nd out of 252 agencies in the US. Workers have only received a 1.54% wage increase over the past 10 years. Outsourcing jobs or contracting services will not solve the problem of a lack of revenue, in particular the state’s unwilling to help fund transit.Report

    Reply
      • JB says:

         @Burroughston Broch I still fail to see how overtime on $20/hour and “fringe” benefits (that is, health insurance, vacation pay, etc – all of which used to be pretty standard not all that long ago among most workers, until corporate/shareholder pay became a bigger priority) is a problem.  The more workers in the Atlanta area that receive a livable, middle-class wage, the less in welfare etc. the taxpayers will have to pay, not to mention experience the even costlier ripple-effect of associated economic and social distress and decline.Report

        Reply
        • Burroughston Broch says:

           JB, ignoring fringe benefits for government employees is part of what’s causing municipal bankruptcies. Looking at the MARTOC 2012 operating report, MARTA paid $227.5million in salaries and $120.9million in benefits. Dividing that by 4,500 employees we get an average salary of $50,600 and average benefits of $28,400, for a total of $79,200 per employee. That’s a long way from $20/hour. MARTA pays substantially more on average than private industry, and the workers can retire at age 50 after 30 years of service.Report

          Reply
        • Burroughston Broch says:

          JB, I looked at the 2012 San Antonio VIA budget (from whence comes the new MARTA head) and compared it with MARTA.
          MARTA – 4500 employees – average direct compensation $50,600 – average fringe benefits $28,400 – total $79,000
          VIA – 1867 employees – average direct compensation $45,100 – average fringe benefits $15,800 – total $60,900
          MARTA employees receive on average 12% higher average compensation and 80% higher fringe benefits than their San Antonio peers.
          This aligns with what the KPMG audit states.Report

          Reply
  2. Randy says:

    As always the press gets it wrong again! I worked for marta for 29 years and for 29 years marta has always blamed the union.  The press is in martas pocket so they always make the union look bad. This is a game marta plays every time a contract comes up. Over that 29 years I received  around 27 to 33 cents on the hour per year.Very small rasie that was offset by me having to pay health ins. Now lets look at these high pensions marta and the press are talking about. I draw $26500 a year on my pension. About 24000 net. WOW!!! Yes this is fact not marta fiction.  This last July Marta felt I was drawing to much ($26500) that they cut my pension by $135 a month by upping my health care cost. I now net $23800 a year. Try living on that. So next time you hear marta crying about union cost or our pensions are to high check into the management waste. Its everywhere.. Randy.Report

    Reply

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