GOV. MAURA HEALEY has gone on a hiring spree at the MBTA, enticing employees to come and stay at the transit authority using a combination of higher wages, improved benefits, and attractive pensions.
The turnaround on the hiring front has been amazing. Toward the end of 2022 and extending into 2023, 860 MBTA employees walked out the door, many of them fearful that a negative change in their pension benefits was looming. After a pension agreement was negotiated in March, putting an end to that concern, and a lavish new four-year contract was negotiated with the T’s biggest union in August, the transit authority shifted into overdrive on hiring. By the end of 2023, the number of employees had risen to 7,063 — 11 percent higher than the previous year. The momentum appears to be continuing into this year.
Suddenly, the MBTA is a desirable place to work. Bus drivers not only receive a $7,500 bonus for signing up, they receive a starting hourly wage of more than $30 – up more than $8 under the new contract and among the highest levels in the country. The T used to scramble to run a training class for 20 to 30 new bus drivers. Now the T is upping the class size from 90 to 100.
Jim Evers, the president of the Carmen’s Union Local 589, the T’s biggest union, says he is witnessing a sea change in the way workers are being treated at the MBTA. “Gov. Healey has stepped up to the plate after inheriting a damaged and tired transit agency,” Evers said.
Under former governor Charlie Baker, the MBTA workforce often seemed to be in a state of turmoil. In 2015, Baker used the collapse of the T during Snowmageddon to push for and win legislative approval to privatize some MBTA operations. In 2017, he used the leverage of more privatization to negotiate a contract with the Carmen’s Union that contained no salary hike that year and a 1.55 percent annual average increase over the four-year term of the contract. The MBTA also downsized the workforce by nearly 300 workers in 2017 by offering a voluntary retirement incentive program.
The turmoil continued in 2021, when the Carmen’s Union contract was extended another two years, with workers receiving 2.5 percent pay increases each year. A long-running pension dispute went to arbitration, with expectations for a cutback in pension benefits. That sent hundreds of employees into retirement and sent the number of MBTA workers plummeting to 5,600 in fiscal 2022, its lowest level since Baker took office in 2015.
Healey’s approach with the MBTA unions has been very different. A four-year contract was negotiated with the Carmen’s Union in August that gave the union a 7 percent wage increase in the first year, a 4 percent increase in the second year, and 3.5 percent increases in the third and fourth years. The raises are accompanied by sign-up bonuses, longevity bonuses, and retention bonuses – all designed to boost hiring and employee retention at the T.
The MBTA contract with the Carmen’s Union represents one of the biggest shifts in policy between the administrations of Baker and Healey. Many view the shift as being about politics – the transition from a Republican governor wary of public sector unions to a Democratic governor more in alignment with the unions – but not everyone sees it that way.
James Aloisi, a transit advocate who previously served as secretary of transportation under former governor Deval Patrick, said Healey is responding to the dramatically changed labor market in the wake of COVID. He said employers across the state are struggling to find workers and have to change the way they recruit them.
“I think all she’s doing is acknowledging the realities of the labor market,” Aloisi said of Healey. “There’s only one way to attract people – with money and benefits.”
The cost of Healey’s new approach to MBTA workers will be substantial. T officials say the base wages of the Carmen’s Union contract will jump $55 million over the next four years, including longevity and retention bonuses. Overall, that’s a nearly 22 percent increase over that four-year period.
Since the Carmen’s Union contract sets the basic outlines for the T’s other union contracts, officials at the transit authority say labor costs overall are expected to rise $100 million over the next four years. And the actual cost is likely to be even higher because the original cost estimates are based on the number of employees at the time the new contracts were signed. The T is busy adding more workers (it currently has 1,300 vacancies) and going through a workforce assessment to determine what the appropriate employee level should be.
Thomas Glynn, the chair of the MBTA board, said at one meeting that the agency is only now getting back to appropriate staffing levels. He said the T had 7,000 employees when he was running the transit authority in 1990 with fewer riders than it serves now.
Still, at an MBTA board meeting last August, Glynn asked T General Manager Phillip Eng how the transit authority was going to pay for the new Carmen’s contract that the board was voting on. Eng said the cost of the first year of the contract was included in the current budget, and future costs will be dealt with on a year-by-year basis.
What Eng didn’t mention is that the T is forecasting budget deficits for the next four years, rising to more than $900 million in fiscal year 2029. Adding to the problem, the governor is also pushing to cut fares in half for low-income individuals, a move that will put more pressure on the MBTA’s finances.
Healey has appointed a task force to come up with a revenue solution for the MBTA by the end of this year. With state revenues tight, MBTA ridership stagnant, a fiscal cliff looming, and labor costs rising, the governor is placing a big bet on the task force’s ability to come up with a solution and her ability to get it through the Legislature.