Lack of local aid from Washington may prompt similar moves here in New Jersey and across the country.
WBGO contributor Bob Hennelly speaks with News Director Doug Doyle about the ongoing economic fallout from the COVID pandemic.
DOYLE: Across the country, the COVID19 public health crisis has also sparked a rapid economic downturn which has generated levels of joblessness that rival the Great Depression. Historically, public employees have been insulated somewhat from the business cycles but the current slowdown is an exception. New York City Mayor Bill de Blasio is now preparing to lay off thousands of civil servants by Oct. 1. With us now is WBGO contributor Bob Hennelly, who also covers City Hall for the Chief-Leader. Thanks for joining us Bob. So, first gives us the economic context for this crisis. Traditionally wasn't one of the benefits of a civil service position job security?
HENNELLY: Absolutely Doug, historically that’s how it worked. But what is going on now is we have this combination of the catastrophic drop off in tax revenue because of the COVID crisis and the public health measures necessary to contain it combined with extraordinary emergency expenditures that weren’t budgeted for. And that adds up to billions of dollars across the country and we still haven’t gotten follow up action from Washington to help the cities, states and counties buck up their balance sheets.
DOYLE: You have been reporting that Mayor de Blasio has said that he has to lay off 22,000 civil servants to balance the budget. Do we have any more specifics about what agencies and job titles have been targeted?
HENNELLY: We have reported in the Chief Leader that at least 400 EMS members who are part of the FDNY have been targeted. That would be about ten percent of the 4,000 member EMS workforce. The Mayor’s office has confirmed that layoffs will occur across the entirety of the city’s civil service, which is dozens of agencies that employ over 300,000 people. But they won’t confirm specific details. As a practical matter, the unions that represent these folks have to be noticed by the end of the month so they can have the 30-day notice as required by law. Of course, the way this would work is that provisional employees, who were not permanently appointed to their job yet, would go first temps and then the way the civil service laws work, it would be the most recent hire that most likely would lose their job because seniority is very important. Now, there are some behind the scenes negotiations going on between the city’s unions and the de Blasio administration to try and head this off.
DOYLE: With regards to those the ongoing negotiations what are the unions proposing to help close the city's budget gap?
HENNELLY: Well, historically one of the things the city has been able to do, and this happened after the 9/11 economic downturn, is to offer individuals who are close to retirement age, and coincidently, at the highest end of the pay scale early retirement. So, if you are 60 or 61 and a few years off from retirement, they can offer you an incentive to retire. The unions are making the case that this would be really important to do now, since older people have a greater exposure to COVID. You could solve a couple of problems here, because as a practical matter, many of these same people work in the sewer plants and keep the vast infrastructure of the city of New York running and many of them are vulnerable to COVID and have been reporting throughout the pandemic. It would make sense, the unions argue, to have those folks go out first and also this would prevent you from having to fire and terminate the young people in these titles. The city often goes to considerable expense to recruit and train these people who often have small children. If they were to be laid off, they would also lose healthcare. So, there is a back and forth going on. This would require enabling legislation from Albany. But time is getting short for this kind of resolution.
DOYLE: Is the situation much different for New Jersey's public employees?
HENNELLY: Well, I guess in one principle way. New York City has not been able to get additional borrowing authority for $5 billion dollars from Albany which would help them out. But in New Jersey, Governor Murphy managed to get a $10 billion loan against future revenue, which has withstood a Supreme Court challenge. Yet, the same fundamental macro- economic challenges exist for New Jersey as New York, without any kind of Federal intervention. What we are seeing here is a collaboration that seems to be working between the CWA, the largest union in the state, which is working with the Murphy administrations and already done things like postpone a two percent raise they were supposed to receive and also workers have taken ten days of furlough. All of these things help the state to preserve its cash on hand. But you can imagine that the countries, the local communities and school boards will all feel these pressures. What’s happened is that the aid that was supposed to come from Washington has gotten hung up and as we get closer to the presidential election it appears increasingly more likely that we won’t be able to get the aid in time for us to put off these layoffs which will come, I might add, at a time that New Jersey and New York are worried about a second wave of the pandemic
DOYLE: As always Bob, thanks for joining us on the WBGO Journal.