Incentives

There have been several articles in the last few months written about how the dc metro (WMATA) employees have been working a bunch of 16-hour days with no breaks in-between. This is said to contribute to mistakes, bidget overruns, and dangerous safety problems.

In a statement in today’s examiner WMATA representatives said that they will phase in a maximum 14-hour day in 2014 (!)

I think that there may be an easier, quicker way to fix this problem. Currently, WMATA employee pensions are based on the 3 highest gross earning years. Given that the employees are hourly, and this overtime boosts their gross earnings, that tremendously increases the pension burden which WMATA has.

I think that this problem with overtime is pretty predictable with these incentives: work like a sled dog for three years and your pension payouts for the rest of your life increase dramatically. I know that •I• would do that.

So here’s a thought for the negotiations next time: make pensions based on the 3-years highest •salary• rather than the gross. This would reduce some of the financial incentive and burden of overtime, while still giving OT pay to the people working it in a given year. It would also mean (and this is the salient point) that a surprise need for OT work (say, repairing after an earthquake) would only hurt the immediate year’s budget, rather than incentivizing the managers to externalize the cost onto future years. Finally, it would mean that WMATA would find itself forced to hire more employees, which is good for the agency (in terms of shared knowledge and experience), good for the union (more members), and good for the area (more jobs).

So given that this both tastes great and is less filling, what’s the over/under on this approach being considered, let alone selected?

About thegameiam
I'm a network engineer, musician, and Orthodox Jew who opines on things which cross my path.

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