Collective Bargaining and the Fiscal Crisis in New York City: Cooperation for Survival

As a result of New York City's fiscal crisis in 1975, both the New York state legislature and Congress passed laws aimed at helping the city recover. As a result of this legislation, the federal and state governments became more involved in the city's affairs and were tasked with monitoring collective bargaining between the city and its employees. Labor and management in the public sector were forced to cooperate in order to get out of the financial predicament, and the city survived the crisis. This article examines the changes in collective bargaining laws and practices that occurred as a result of the crisis, including productivity bargaining and gain-sharing, coalition bargaining, the use of salary review panels, and the emergence of the city's ability to pay as a major factor in public sector bargaining.

The impact of the crisis on both labor and management is also examined. This articles concludes that although many people blamed collective bargaining for the crisis, there is much evidence that it actually helped the city solve the problem. Additionally, the financial crisis led to greater participation by labor unions in government processes.