Pay Raises for Me…

posted at 8:52 am on May 5, 2009 by Slublog

The Boston Herald stirs up some trouble.

As recently as March, Boston Newspaper Guild president Dan Totten noted union members haven’t had a raise since 2006 as he slammed Globe and New York Times [NYT] Co. management for getting an extra two weeks paid vacation in exchange for accepting a 5 percent pay cut.

“The BNG is now in its fourth year of a wage freeze. Yet today, The NYT and Globe announced a five percent wage cut for managers, who will also receive an additional 10 personal days,” Totten said in a March 30 statement. “The Guild believes this is an affront to the workers who work without pay raises and perks every day.”

Records show that Totten’s Guild salary has jumped 12 percent in three years, from $87,482 in 2006 to $97,929 in 2007 to $98,076 in 2008.

This story is fun, because it displays one of the negative consequences of organized labor on the Globe’s bottom line while also pointing out hypocrisy by those who are paid to represent those workers. Win-win. This news puts Totten in the uncomfortable position of having to explain why he’s more worthy of a raise than those he’s paid to represent.

I’m not sure what reality Totten is inhabiting when he asks for wage increases, when his employer is losing readers and money at an impressive rate. Where, exactly, does Totten propose the NYT company find the money? And even if the money were somehow to appear to save them, how can Totten justify asking management to pay more to those who created a failing product? Raises are not entitlements. Also consider the fact that what Jules Crittenden describes as “hefty wage, benefit and severance packages that would be the envy of public employees” may have helped contribute to the bad financial situation.

The NYT and Totten should have seen this coming. As Greg Mankiw points out, “When unions push wages above the equilibrium of supply and demand, the side effects are not entirely benign.” Demand for the Globe has been falling for years and use of the internet as a news source has been going up. This is not a new trend, and yet Guild employees were given a pay raise as recently as 2006.

Like Howie Carr, I don’t feel at all sorry for the Globe. They maintained an unsustainable business model in a time of increasing financial and competitive challenges. They’re not being pushed over the cliff. They jumped a long time ago. It just took a while to reach the bottom.

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