In an era when many employers are slashing employees’ health benefits, the Port Authority of New York and New Jersey is bucking the trend: The interstate transportation agency is actually requiring employers who hold service contracts with the Authority to provide health insurance to their employees and families — at no cost to the employees.
Those service workers covered by the new policy — security guards, parking lot attendants, janitors, customer service representatives, taxi dispatchers and landscapers — are among the only people working at Port Authority facilities not currently provided health insurance. And not coincidentally, the majority of those affected by this policy are security guards in the midst of a drive to unionize under the auspices of SEIU Local 32BJ.
“It’s very much a part of an initiative that we’ve brought to the Port,” Local 32BJ spokesman Matthew Nerzig says about the benefit and wage policy that was approved at the Authority’s Sept. 20 board of commissioners meeting.
Nerzig praises the Port Authority for being the first public or quasi-public entity in the New York City area to update its contracting regulations and improve service workers’ wages and health benefits. His union now plans to use the Authority’s policy to pressure other agencies in the metro area that issue contracts with public money to follow suit.
For several months Local 32BJ and the Port Authority have been discussing ways to provide health insurance and to boost pay in these traditionally low-wage, high-turnover occupations. A Port Authority spokesman, Steve Coleman, says executive director Anthony Shorris has been committed to this effort because he knows the policy will have far-reaching effects beyond employees’ health and quality of life, since a well-paid, insured workforce tends to be more reliable and does not overextend local emergency health resources. Although 32BJ advocated primarily for security guards and janitors, the Port Authority included all contracted service workers in the policy. “We’re showing we’re concerned about the workforce — regardless of occupation,” says Coleman.
In short, the policy requires any company bidding on service contracts at any Port Authority facility in New York City or New Jersey to show that it will pay employees the local prevailing wage for each occupation and provide health insurance.
About 1,600 employees in the New York City area will ultimately be affected. Because existing contracts can’t be changed, though, Coleman says many of those workers won’t reap the benefits of the new policy until after each contract expires and is re-bid.
The first two contracts renewed since the policy took effect have already spiked the wages and will provide health insurance by year’s end for roughly 1,000 security guards at La Guardia, John F. Kennedy and Newark Liberty Airports.
Tom Materna is one of those guards. He has been working full time as a security guard at Newark airport since he retired as a sheet metal worker a few years ago. In the weeks since the Port Authority’s policy was passed, he has earned about 40 cents more per hour. The unarmed guards at the airport, who work for a company called FJC Security Services, earn between $10 and $15 an hour.
Materna says while the raise is welcome, the new health benefit is what will ultimately make service jobs like his more desirable and stable. “You’ve got the peace of mind going to work that your family is being taken care of,” says the 71-year-old, who spends many of his days checking over delivery trucks entering the airport grounds.
In theory, firms with long-standing contracts could lose them if another entity can insure its employees more cheaply. To make sure competing companies offer fair and comparable health care coverage, Coleman says the proposed benefit package will be evaluated as part of each bid. “If it looks like it’s a bid that does not have an adequate level of benefits, I’m sure we will reject that,” he said. The security company FJC would not comment on how the policy might affect its future bids, referring questions back to the Port Authority.
For his part, Coleman says “time will tell what impact it will have” on the Port Authority’s budget since the transportation agency itself directly provides neither the insurance nor the wage increases; those responsibilities lie with the bidding companies. As a result of this policy, contract bids will certainly come back higher, but exactly how much higher remains uncertain, according to Coleman. Out of its $5.01 billion budget for 2006, the Port Authority spent a total of $590 million on contracted services, which include the kinds of service jobs covered under the new policy.
Nerzig argues that not providing these contracted employees with health insurance exacts an even greater cost on the Port Authority in the form of rapid job turnover, and on local communities in the form of overtaxing hospital emergency rooms and raising insurance costs for everyone. “It’s the right thing to do by these workers, but it also makes sense,” Nerzig says.