Issue 529 to

Two debilitating BART strikes in 2013 not only inconvenienced thousands of riders but revealed the many challenges that lie ahead for the transit provider, from how to invest in the existing system to how to repair relations between labor and management.

When Transit Goes Awry

When BART went on strike twice in 2013, the Bay Area learned just how dependent it is on a functioning transit system.

Urbanist Article

What happened:

BART went on strike, for the first time since 1997.

What it means:

The Bay Area learned just how dependent it is on a functioning transit system, which leads to difficult questions for the future: How do we make sure BART continues to expand to handle more riders as the region grows, and how do we make sure strikes don’t happen in the future?

Most people think of the BART strike as the time when BART workers paralyzed regional travel. Some people understand that those days were a preview of what awaits the Bay Area as we add another 2 million residents without any increase in regional transportation capacity. The strike should serve as a wake-up call with regards to the latter.

In many ways, it seems inevitable that BART went on strike this year. Labor was fed up with years of flat wages, years of recession and years of watching economic inequality grow and fearing that new provisions would undermine the middle-class life that many workers had achieved.

Not all of labor’s issues were specific to BART. The anger felt by the rank and file was at least partly in response to much bigger economic trends. Since the early 1970s, wages for many workers in the country have been stagnating as incomes grow for those at the top and productivity continues to shoot up by 80 percent (because the gains from wages have flowed to owners of capital, not to the average worker). Inequality has been growing, like a quiet cancer, until the Occupy Movement put it at the center of the country’s awareness in 2011. Although BART employees make fair wages, rising costs in many other aspects of their lives (such as day care, college and of course, housing) put further pressure on them. After a labor contract in 2009 that kept wages flat, BART’s unions were ready to make progress again — channeling not just their own economic self interest, but the broader frustration felt by so many people about the fate of working-class and middle-class America.

Management, on the other hand, believed that the agency was at a crossroads that would determine the long-term viability of the entire BART system. Years and years of deferred maintenance have been eating away at the tracks, the train cars, the tunnels and the stations. A system that got used to thinking of itself as “new” compared with Muni or the East Coast transit systems is now four decades old. The system still uses its original fleet of railcars, currently the oldest among U.S. transit agencies. Under its new leadership, BART finally tallied up the maintenance reinvestment costs it is facing, and the capital needs of an expanding ridership, and was horrified to discover that it needs many billions of dollars to operate. Meanwhile, state and federal support for transit continues to dwindle.  People were beginning to talk about New York in the 1970s — the archetypal precedent for what happens when transit maintenance goes unfunded for too long.Management was also concerned about the cost of BART’s benefits package: ballooning pension costs (increasing at more than 6 percent per year over the past decade) and medical insurance premiums (increasing at more than 12 percent per year), with BART employees making either no, or low, contributions to increasing costs.The irony, and perhaps the root of the vastly different perceptions between labor and management, is this: despite low wage increases, BART’s overall labor costs keep increasing. Workers don’t experience increases in pay or benefits, yet management experiences big increases in costs. Faced by governments everywhere, this structural problem has been the focus of pension reform efforts at the state and local level. 

Finally, management was also concerned with work rules, which had not been reformed in a very long time.

Faced with this kind of critical choice, the job of BART management seemed clear: They needed to get a labor contract that would control operating costs so that the agency could fund its core capital needs — starting with its first three projects: replacing and expanding its fleet of railcars (around $3 billion, depending on exactly how many are ordered), investing in a new train control system ($700 million), and building a new maintenance facility ($430 million). Adding up these projects plus the full backlog of maintenance needs, BART’s unfunded system rehab needs are $7.5 billion over 30 years, or about $250 million per year. BART’s operating budget is only about $500 million annually.

Given all of this, is it any wonder that the two sides could not agree? Is it any wonder that it seemed “worth it” to take the system down for a period of time with a strike?  Many have suggested a ban on transit strikes. If we are actually going to rebuild the Bay Area to be transit dependent, then the transit cannot be withheld. Like transit on the East Coast, like Muni, like cops and firefighters everywhere, transit workers should not be allowed to strike, goes this line of thinking.  This makes sense. The question, however, is what happens instead — how are labor disputes to be resolved when they reach an impasse? And here, the simplicity of banning strikes dissolves into a mush of competing ideas. Would management have the right to impose contractual terms? This is impossible to imagine in a Democratic state like California. Would arbitrators have the right to impose contractual terms? This is precisely how Stockton and Vallejo (not to mention Detroit) went bankrupt, as arbitrators make decisions based on fairness, not on a public agency’s ability to pay. Under binding-interest arbitration as it is normally practiced in California, it is highly unlikely that BART could control operating costs in order to reinvest in its capital needs.

Does this present us with a choice between the severe unreliability caused by strikes vs.  the long-term unreliability caused by physical deterioration? Not quite. There are all kinds of variations on arbitration, some of them quite promising, but it’s fair to say that this is going to be a complicated problem to fix.

As for the settlement: Wages will increase in a series of steps, to over 16 percent at the end of four years. Each year employees will make an increasing contribution to their pension cost and will pay an increasing share of rising medical premiums. BART gained control over some key work rules, which, in theory, should allow it to make up for the added costs of the labor contract. BART should be able to earmark enough money each year to fund the local portion of its railcar and maintenance facility projects --but the annual maintenance backlog remains unsolved. But as of this writing, the settlement is under litigation — due, it appears, to a drafting error in the agreement.

The creation of the BART system was a proud moment for the Bay Area, very much against the grain of the postwar consensus about the embrace of the automobile. But we’ve rested on our laurels for a long time.  Our generation has to figure out how to reinvigorate BART for the future — how to reinvest in the physical system, how to expand service so that BART can carry many more passengers and how to heal the terrible divide between labor and management so that the trains can actually be run.

Gabriel Metcalf is SPUR's executive director.