Monday 20 December 2010

TTC strike: each day costs $50 million. What!?!

Make the TTC an essential service otherwise Toronto loses $50 million a day.

For some time now, I have heard the number of $50 million being bandied about as the loss to the city for every day of a TTC strike. Considering this huge number, I am sure anyone would immediately say we collectively can't afford this so let's make the TTC an essential service to avoid any possibility of a strike. While there may be additional costs on an on-going basis like higher salaries for TTC employees, the loss far outweighs the rise in labour costs.

However, where the heck does this number come from?

After doing some digging around and getting a kindly point in the right direction from a Toronto Sun reporter, I discovered this article

The National Post
Hall Monitor: TTC strikes pack $50-million economic hit
by Allison Hanes - October 01, 2008

In this article, Ms. Hanes refers to a report by the city manager estimating that the cost of a transit strike is $50 million per day for the City of Toronto. Ms. Hanes also discusses the study done by C. D. Howe Institute that I discussed in my blog TTC: Essential Service vs. the Right to Strike. In a nutshell, the author Benjamin Dachis, in going back over strikes from 1976 onwards, concludes that in making a transit an essential service, labour costs automatically go up. He also discusses how this does not stop illegal strikes from occurring but let's leave that one aside for the moment.

Ms. Hanes concludes quite rightly that the costs and problems brought up by Mr. Dachis are negligible in face of a $50 million a day loss to the city. However where the heck does this number come from? Ms. Hanes gives a link to the following report (in PDF) from the city:

Declaring the Toronto Transit Commission an Essential Service in Toronto
To: Executive Committee
From: City Manager
Date: September 22, 2008

I quote from this report:

EDCT [Economic Development, Culture & Tourism Division] have estimated the short-term effects on the City of Toronto's economy caused by a strike at the TTC are approximately $50 million per day (Monday to Friday). This estimate is based on the assumption that a TTC strike would reduce the total output of goods and services produced in the City of Toronto (over $500 million per day) by about almost 10%.

[furrowed brow, confused look, staring at the ceiling reflecting on what I've just read] Just a sec, now. I read the words "this estimate is based on the assumption". Is based on the assumption? What the heck? That's not scientific. In fact, I have absolutely no idea why the city manager in preparing this report would even be allowed to say such a thing. Benjamin Dachis in preparing his study for the C. D. Howe Institute poured over information pertaining to every strike from 1976 onwards. The city manager offers "an assumption" without any supporting facts, figures or referenced works. How about we assume 5%? How about 12%? Yes, the number is $50 million if the assumption is 10% because that is just a question of mathematics. That doesn't mean the choice of 10% is correct.

I agree that $50 million is so huge that I myself would vote to avoid a strike at just about any cost but am I voting for the TTC as an essential service based on correct information? What if the cost of a strike was $5 million a day? Would anybody still vote for the TTC as an essential service? After all, Benjamin Dachis estimates labour costs for the TTC are going to go up $6 million a year.

What happened to me during the last strike of 2 days in 2008? I work for an insurance company and all of the staff is equipped with laptops and Internet access. I worked from home. I had a computer, a direct hook-up to the office and a phone to speak to anybody. Gosh, if I wanted to push it, I could have used Skype to see anybody I wanted. In other words, my entire company continued to do business as if nothing had happened. Yes, a few people were inconvenienced but our business did not stop and remained unaffected by the strike.

What about others? Obviously certain industries like manufacturing require labour to come to the plant. Did these businesses come to a dead halt? What about stockpiled inventory? If they failed to produce product during the two day strike, does that mean they had no product to sell? However, did they produce nothing? Did the entire plant actually completely shut down because of the strike? I am certain that as one moves away from the core of Toronto, people would be using cars for transportation more than public transportation. I am basing that opinion on personal experience.

I come back to the veracity of $50 million. I just find that difficult to believe. Before committing to any vote based on such an assumption, I would like to see some documented proof of the actual cost to the city of a strike day. Yes, a strike is a pain in the butt but I can't help feeling that $50 million is more of a scare tactic with a politic agenda than a legitimate attempt to realistically assess the situation. I find it astounding to read over and over again in various articles, in opinions given by politicians, ad infinitum how the TTC must be an essential service because of the loss of $50 million. I go back to the source of this statement and I can find absolutely nothing in black and white which would in any way justify saying such a thing. Before I jump out of the airplane, I would like to have just a tad more assurance that my chute will open than your "assumption".

More importantly though, how did this whole question get tabled in the first place? In adding up the days of every strike the TTC has ever had, I come up with a total of 75 days. The TTC was started in 1921 so over its 89 year history, it has been out on strike 0.84 days per year.

However if I look back on the time I have spent in Toronto starting in 1991, how many times have I been affected by a strike and how many days have I been inconvenienced? Roughly speaking, I've been here about 7,300 days so 13 days of strikes equates to 0.18% of the total.

If Mr. Dachis's calculations are correct, everyone wants to spend an extra $6 million a year to avoid what has happened less than one fifth of one percent of the time I've spent in Toronto over the past almost 20 years.

Where are we going with this?
Benjamin Dachis predicts labour costs will go up under the essential service model. Over the weekend I read the following:

By Jenny Yuen - December 18, 2010

Here we go. According to Ms. Yuen, bus and subway operators are paid on average $55,000 a year. She reports that Bob Kinnear, Amalgamated Transit Union Local 113 boss, has said that if the 10,000 employees he represents cannot strike, they should be paid as much as cops and firefighters — which would mean an extra $10,000.

Hmmm, if I multiple 10,000 employees by $10,000 per year, that comes up to $100 million per year. Ah, that's a few shekels in my book. Imagine you start with the idea of avoiding a loss of $50 million per day for a TTC strike. Now, you could end up paying an extra $100 million per year. Mr. Dachis said $6 million but here's the first sign that his estimate may not match what the union will want out of an essential service designation. These are precisely the issues everybody is not addressing because everybody thinks they've solved the problem. This whole thing started out as rolling a snowball down the hill and now it is slowly turning into an avalanche.

By Sue-Ann Levy, City Hall Columnist - December 18, 2010

Ms. Levy makes some good arguments about the losses and the inconvenience to the city during a strike.  However, I come back to the assumptions made about all this. Is it really $50 million per day? Just how often do we have strikes? And as Ms. Levy points out

Instead of holding firm on a lawsuit against Kinnear to recoup the $3 million in damages incurred during the illegal strike, Giambrone et al caved, settling for some weak-kneed deal that saw the union agreeing to bring in spare subway drivers to handle the peak periods instead of regular drivers on overtime.

How is it that any strike happens at all? Yes, there are negotiations but is it true that Kinnear and group caused $3 million in damages and were not held accountable? Is it true that strike was illegal? Illegal in my book means paying fines or going to jail. If it was illegal, why was Mr. Kinnear not held accountable?

Final Word
I have asked many questions about Rob Ford and his plans. Now that he is in power, I will support him but I am going to continue to ask questions about the numbers. I have seen throughout my life over and over again people making decisions without having all of the facts and ending up with results that do not match in any way the original vision. Just how dumb can it be? Here's my example. You go out and get rid of your Ford Escort car which costs $15,000 and buy a Lamborghini which costs $250,000. It is better, faster, state of the art and an instant classic. You brag to everybody about how much better you are with a car whose top speed is 380 kilometres an hour. The laugh? The speed limit in Ontario is 100 km/h.

That's the sort of lack of logic in the decision making process which leaves me shaking my head. Add on top of it the screwball things that happen when you get a group of people together and how misinformation gets passed around like crazy, and you have a sure-fire recipe for making the wrong decision.

If $50 million is correct, prove it and you'll have my vote. Please do not justify your decisions by telling me "based on an assumption of 10%". I'm not stupid; I can calculate what 10% is of $500 million but don't use that math to somehow justify your assumption. I want some proof. Let's be careful as a group to not fall into the trap of blindly following the crowd.

Facts are not decided by how many people believe them. Truth is not determined by how loudly it is shouted.
- sign at the Rally to Restore Sanity, October 30, 2010, Washington DC

None of us is as dumb as all of us.


my blog: TTC: Essential Service vs. the Right to Strike


Site Map: William Quincy Belle

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