3 in a series: Turning points in DC 37 history the 1970s
saves New York
DC 37 fights for survival in the fiscal crisis of the 70s
37 plays a central role in helping the city avert bankruptcy.
Laid-off Laborer Fred Russo speaks at a 1975 Delegates meeting as members debate
whether to accept a wage deferral to save jobs or to go on strike. Throughout
the tumultous 70s, members held raucous union meetings and participated
frequently in demonstrations as DC 37 and other municipal unions came under pressure
to make givebacks and were hit with layoffs of thousands, including Firefighters,
Police Officers, Teachers and Sanitation workers.
DC 37 members
joined other city employees in a march on Wall Street. Jobs and services
are a hell of a lot more important than profits, Victor Gotbaum said at
District Council 37 confronted serious threats
to its existence in the turbulent 1970s, as working families struggled with high
inflation and high unemployment and New York City teetered on the edge of bankruptcy.
fiscal crisis of 1975 led to tens of thousands of layoffs of municipal employees20
percent of the city workforce, by one estimate.
Workers were hit with a
wage freeze, deferral of a negotiated raise and cuts in city contributions for
JAIL: Union members accompany Lillian Roberts as she enters City Jail, a former
debtors prison, after Gov. Nelson Rockefeller ordered her locked up under the
Taylor Law for leading a hospital strike. Inset: All her bags are packed and she's
ready to go.
paid the price, said William Tabb, a retired economist from the City University
of New York and author of The Long Default: New York City and the Urban
The fiscal crisis weakened the citys ability
to fight back against the right-wing political assault on the public sector and
organized labor that continues today. New Yorks working class paid a severe
price as key parts of the citys progressive tradition were wiped out. Free
tuition was lost at the City University of New York, transit fares skyrocketed
by 40 percent and the business sector began its ultimately successful attack on
A lot of harm was done to the public sector as a result
of the fiscal crisis of the 70s, said Josh Freeman, a labor historian
at Queens College. In the end, I dont think the basic notion of expansive
government was destroyed. But it was damaged.
For DC 37, then the
leading municipal union in the United States, the goal literally became survival.
Gotbaum, executive director of the union from 1965 through 1987, exercised extraordinary
political savvy as he played a central role in resolving the crisis. Gotbaum teamed
up with financier Felix Rohatyn and Gov. Hugh Carey to work with local union leaders
and the financial community to avert bankruptcy and shore up the citys finances
by tapping into the pension system as banks continued a capital strike
by not extending credit to the city. The unions were able to prevent bankruptcy,
keep collective bargaining, and save their seat at the table, Freeman said.
At least they survived to fight another day.
1974, Local 420 members go on strike for four days to stop hospital closings and
to prevent 4,000 layoffs.
years that preceded the 1975 fiscal crisis represented a golden era of militancy
and growth for DC 37.
This was a militant workforce,
said former New York Public Library Guild Local 1930 President Ray Markey, who
put forth a motion calling for a general strike as union delegates met at the
height of the fiscal crisis. The union had been formed through strikes in
the 1950s and 60s. You had people who came out of the civil rights movement
and the womens rights struggle. They were used to marching. And they had
vital benefits to protect.
In 1968, DC 37 helped its national union,
the American Federation of State, County and Municipal Employees, organize tens
of thousands of state hospital employees. DC 37 Executive Director Lillian Roberts,
who was then the unions associate director, organized four state mental
The union had hoped that Gov. Nelson A. Rockefeller would recognize
the workers right to a union, but he put the lie to his liberal
image by refusing to negotiate. His intransigence provoked a 10-day strike by
workers at the four hospitals.
members and other municipal workers strike in 1971 over Gov. Nelson A. Rockefeller's
sabotage of pension legislation. Union action led to highway traffic jams.
37 contingent gathers before the Capitol on April 26, 1975. They were part of
a throng of 60,000 workers who marched to demand federal aid for cities.
The workers strike forced the state to
allow them to unionize, but under the just-passed anti-strike Taylor Law, Rockefeller
ordered Roberts sentenced to 30 days in jail in mid-December.
governor plays with the rights of poor people to keep them from choosing their
own union, Roberts said. I help organize them for a better life. I
go to jail. What kind of law is this?
Militant union demonstrations
convinced the governor to let Roberts out in time for Christmas.
Rockefeller provoked another strike when he blocked the state Legislature from
implementing pension improvements that DC 37 had negotiated. The governor and
his anti-labor allies in Albany didnt anticipate the backlash from union
workers in New York City.
On June 7, thousands of commuters were stranded
as traffic snarled on the highways throughout the city. Drawbridge operators in
Teamsters Local 237 had raised the bridges and Motor Vehicle Operators in Local
983 left their trucks without keys in strategic locations on the
All told, some 8,000 union members walked out, including DC 37
members from city parks, sewage plants and incinerators.
a getaway car, said former Laborers Local 924 President James Welsh, now
retired. Workers left three or four big trucks across the lanes of the Major
Deegan in the Bronx. They hopped in my car and I drove them out of sight.
1971 strike failed to revive the pension legislation, but Gotbaum and Mayor John
Lindsay reached a historic agreement to provide welfare fund benefits and health
insurance to retirees. Today, as we see employers cut back and even eliminate
health and pension benefits, we understand how important health coverage and the
unions prescription drug benefit are to our retirees, said DC 37 Retirees
Association President Stuart Leibowitz, then a Local 371 officer.
fiscal crisis occurred as signs were emerging of a business backlash against the
gains of public employee unions and the growth of the public sector around the
country. A favorable wage pact for DC 37 workers in 1969 was attacked by bankers
and budget hawks upset about the rising cost of services in the city, where the
welfare population had doubled since the mid-60s and the tax base had eroded
as a result of deindustrialization and middle-class flight.
The first major
indication that the city was on a path toward bankruptcy came when Mayor Abraham
Beame grappling with a $140 million budget gap announced 1,500 layoffs
in November 1974 and another 4,000 in December. Thousands of provisional workers
lost their jobs.
The real crisis erupted in the spring as the citys
budget deficit ballooned to $1 billion, and the threat of bankruptcy became real
as bankers cut off the citys credit and demanded repayment of short-term
Executive Director Victor
Gotbaum was the chief media spokesperson for municipal
during the 70s fiscal crisis, when the
city nearly went bankrupt.
employed under the Comprehensive Employment and Training Act, the federal jobs
programs, hit the streets to call for continued funding of CETA positions. Thousands
of CETA workers eventually won permanent civil service positions.
was a bombshell because no one really anticipated it would be so severe,
said former DC 37 negotiations chief Alan Viani.
DC 37 and the municipal
unions came under enormous political and media pressure to make sacrifices. Leading
Wall Street bankers called for thousands of layoffs and deep service cuts.
was when Gov. Hugh Carey stepped in. He reached out to Gotbaum and Wall Street
financier Felix Rohatyn, who in the ensuing months would be the leading architects
of the crisis resolution that narrowly averted bankruptcy when the pension systems
bought city debts and most city workers deferred an expected 6 percent wage increase.
mass layoffs of an estimated 50,000 public employees looming, DC 37 itself went
into a crisis mode. Raucous union meetings, picketing and demonstrations were
frequent. DC 37 members probably accounted for 40,000 of the 60,000 union activists
who participated in a labor March on Washington and rally at RFK Stadium
on April 26 to demand federal assistance for the nations cities and government
action to help end the recession. On June 4, thousands of public employees mounted
pressure on the bankers with a huge demonstration on Wall Street.
the pension bailout and wage concessions that year, the city continued pressing
for givebacks and sacrifices as the fiscal problems continued in 1976. A Local
420 strike led by Roberts prevented layoffs at the public hospitals. Finally,
the threat of bankruptcy ended, when Gotbaum negotiated an agreement in the Hilton
Hotel on June 30 that required workers to take a one-week pay lag.
was very worried about bankruptcy, Gotbaum told PEP in a recent interview
in which he looked back on the fiscal crisis.
I didnt want to do
that because judges are so conservative. My attitude was that we would all go
down together if we didnt work this out.
If the city went bankrupt,
a judge could have thrown out union contracts and given pension funds to creditors.
By negotiating the pension bailout and wage deferral which was less onerous
for lower-paid workers Gotbaum preserved the collective bargaining process,
the pension system and benefits won over decades, and he saved, according to Rohatyn,
as many as 100,000 jobs.
a protest, from left, Local 1549s Lee Clarke, DC 37 Associate Director Lillian
Roberts and Local 1930s Susan Ortega head for a meeting with Mayor Ed Koch.
The Comprehensive Employment and Training Act,
a federal jobs program originally established for the hard-core unemployed, proved
to be the avenue for thousands of DC 37 members and other municipal workers to
return to the city payroll. DC 37 at first objected to the program, arguing in
court that it was being used illegally to replace laid-off civil servants. Pressure
from CETA workers led the union to push the city to hold civil service exams for
them and to fund the jobs when federal money ran out.
DC 37 Safety and
Health Director Lee Clarke escaped unemployment in 1977 when she was hired into
a CETA-funded clerk position at the Health and Hospitals Corp. At first rebuffed
by her shop steward, who erroneously believed CETA workers didnt have the
right to be in the union, Clarke immediately joined Local 1549 and became an activist.
She was one of the leaders of the CETA workers who convinced DC 37 to take up
their cause to become civil servants.
A breakthrough occurred in 1979 when
CETA activists tied up the Brooklyn Bridge for a half-hour, leading Mayor Edward
Koch to meet that day with a delegation led by Roberts and agree to move many
CETA workers into city jobs.
A majority of the people facing layoffs
eventually found jobs either with the city or in the private sector, Clarke
said. Was everybody saved? No. But the agreement with Koch actually helped
save the union. For some locals, the layoffs would have been a heck of a hit.
Treatment Workers Local 1320 President James Tucciarelli is also a former CETA
worker. Trained as an electrician but without steady work, Tucciarelli was relieved
to find a CETA job at the Dept. of Environmental Protection so he could support
his wife and two children.
We were able to get a civil service exam,
Tucciarelli said. I studied hard and was high on the list. The funding had
run out for my CETA job when there was a message for me saying there was a job
Looking back at the 70s, Tucciarelli
said, The unions were really able to do something. We bailed out the city
and saved our jobs. This is sure something we can be proud of.