Feds Rule Out Transit Efficiency With Labor Rules

One of the primary benefits of competitive bidding or outsourcing, even if it includes existing public employees or collective bargaining units, is the ability to increase efficiency by reconfiguring labor arrangements. Former Indianapolis mayor Stephen Goldsmith pioneered this approach, dubbed the “Yellow Pages Test,” during his tenure (see his discussion in his book, The Twenty-First Century City. (Reason’s extensive work on privatization can be found here.) Unfortunately, transit agencies have been hamstrung by federal regulations from using this management and efficiency enhancing tool through Section 5333(b), Title 49 U.S. Code (formerly known as Section 13(c) of the Federal Transit Act).
According to the U.S. Department of Labor, any time federal funds are using to “acquire, improve, or operate a transit system, Federal law requires arrangements to protect the rights of affected transit employees.” U.S. law Section 5333(b) “specifies that the arrangements must provide for the preservation of rights and benefits of employees under existing collective bargaining agreements, continuation of collective bargaining rights, protection of individual employees against a worsening of their positions in relation to their employment, assurances of employment to employees of acquired transit systems, priority of reemployment, and paid training or retraining programs.”
In many cases, of course, fewer employees may be needed even though the ones that remain may be more highly compensated because the skill levels and responsibilities have changed substantively. Thus, the inability to more efficiently manage labor becomes a hurdle to achieving efficiency because federal labor law specifically limits the ability of transit agencies (or private contractors) to reorganize the workplace if it significantly impacts existing unionized transit workers. Some agencies have interpreted the common-sense language in the law to mean that private contractors much employ the same transit workers in the same jobs at the same wage and benefit levels. (These restrictions only apply to federally funded projects and programs.)
For an example of innovative thinking on outsourcing and contracting out, read up on Denver’s aggressive use of public-private partnerships in our 2008 Innovators in Action edited by Len Gilroy.

Samuel R. Staley, Ph.D. is a senior research fellow at Reason Foundation and managing director of the DeVoe L. Moore Center at Florida State University in Tallahassee where he teaches graduate and undergraduate courses in urban planning, regulation, and urban economics. Prior to joining Florida State, Staley was director of urban growth and land-use policy for Reason Foundation where he helped establish its urban policy program in 1997.

Staley is the author of several books, most recently co-authoring Mobility First: A New Vision for Transportation in a Globally Competitive 21st Century (Rowman & Littlefield, 2008). Texas Gov. Rick Perry aid Staley and Moore "get it right" and world bank urban planner Alain Bartaud called it "a must read for urban managers of large cities in the United States and around the world."

He is also co-author, with Ted Balaker, of The Road More Traveled: Why The Congestion Crisis Matters More Than You Think, and What We Can Do About It (Rowman and Littlefield, September, 2006). Author Joel Kotkin said, "The Road More Traveled should be required reading not only for planners and their students, but anyone who loves cities and wants them to thrive as real places, not merely as museums, in the 21st Century." Former U.S. Secretary of Transportation Mary Peters said, "Balaker and Staley clearly debunk the myth that there is nothing we can do about congestion."

Staley's previous book, Smarter Growth: Market-based Strategies for Land-use Planning in the 21st Century (Greenwood Press, 2001), was called the "most thorough challenge yet to regional land-use plans" by Planning magazine.

In addition to these books, he is the author of Drug Policy and the Decline of American Cities (Transaction Publishers, 1992) and Planning Rules and Urban Economic Performance: The Case of Hong Kong (Chinese University Press, 1994).

His more than 100 professional articles, studies, and reports have appeared in publications such as The Wall Street Journal, The New York Times, Washington Post, Los Angeles Times, Investor's Business Daily, Journal of the American Planning Association, Planning magazine, Reason magazine, National Review and many others.

Staley's approach to urban development, transportation and public policy blends more than 20 years of experience as an economic development consultant, academic researcher, urban policy analyst, and community leader.

Staley is a former chair for his local planning board in his hometown of Bellbrook, Ohio. He is also a former member of its Board of Zoning Appeals and Property Review Commission, vice chair of his local park district's open space master plan committee, and chair of its Charter Review Commission.

Staley received his B.A. in Economics and Public Policy from Colby College, M.S. in Social and Applied Economics from Wright State University, and Ph.D. in Public Administration, with concentrations in urban planning and public finance from Ohio State University.