Wednesday, October 12, 2005

The Marginal Cost of Being a Green City

A productive municipal government produces output using relatively little labor and other inputs. One important output is garbage collection. In the past, New York City was not a productive municipal government. Today the New York Times is celebrating a productivity improvement in New York City garbage collection. Is it a new piece of equipment that makes it easier to scoop up trash and dump it? Not exactly.

October 12, 2005
City Said to Reach Innovative Deal on Sanitation Contract

"Mayor Michael Bloomberg will announce a 17.5 percent raise today for the city's 6,600 sanitation workers as part of a 51-month deal that his administration says is a landmark on increasing productivity.

The tentative contract would give the Uniformed Sanitationmen's Association the largest raises of any municipal union in the current round of bargaining. But city officials said the raises were financed by various measures to raise productivity, including an agreement to lengthen each truck's collection route.

Most of all, Bloomberg administration officials were boasting about the introduction of one-worker garbage trucks in what they called a productivity breakthrough. Under that arrangement, one worker, the driver, will pick up the large, metal "roll-on, roll-off" garbage boxes and take them to the dump.

As a result of these productivity measures, the city expects to be able to reduce the sanitation work force by 200 workers."

THIS ARTICLE raises the interesting question of how much were New Yorkers overpaying for garbage pickup? I'm assuming that the Unions wanted this overstaffing of garbage trucks to increase their membership and their dues. In addition, with 2 guys for each truck the workers could work less hard.

I'm confused about whether this "price premium" for garbage pickup affected NYC's "greeness"? If NYC had privatized garbage pickup, it is obvious that a for profit would have used the efficient capital to labor ratio but would the quality of service be any different?