Unions love New York's new Mayor Bill de Blasio. But can he deliver?

After years of austerity under Michael Bloomberg, New York City unions see Mayor-elect Bill de Blasio as a powerful friend. But the city faces a $2 billion budget shortfall, and he's unlikely to give labor everything it wants.

When Bill de Blasio won the New York City mayor’s race in a historic landslide Tuesday, most of the city’s 152 municipal unions felt a wave a relief – if not outright joy.

The mayor-elect, the first Democrat in 20 years to hold an office often called the second toughest job in America after the presidency, proclaimed a lofty liberal vision for the city, emphasizing its growing economic inequality and promising a new redistribution of the city’s wealth.

It is a message that makes most union leaders feel they have a new friend in city hall. And even though Mr. de Blasio offered few specifics about how he planned to handle the city’s looming contract negotiations, his campaign theme of “a tale of two cities” couldn’t be more apropos for how they’ve felt after years of austerity under Mayor Michael Bloomberg. All of the city’s 300,000 municipal union members have been working on expired contracts, and the vast majority of workers have gone without a raise for 3 years or longer.

Indeed, most believe addressing the city’s long-neglected union contracts will be the first tough test for the de Blasio administration.

“I think that’s going to be a really difficult time for him and I think he’ll have no honeymoon as he goes right into that,” says Jeanne Zaino, professor of political campaign management at the New York University School of Continuing and Professional Studies. “It’s going to be a huge challenge.”

 And how well he meets this challenge may very well determine the viability of left-wing urban politics for years to come. After a campaign of unabashed, old-school liberalism – and a justly-claimed mandate after a 73-point triumph in a city on a global stage – de Blasio must now navigate the city’s treacherous labyrinths of political power centers and webs of competing municipal bureaucracies.

 But as the new administration begins to come together, there is optimism.

 “New York has the ability to set a national precedent by adding a constructive dialogue between the city's labor movement and the mayor's office,” emails Vincent Alvarez, president of the New York City Central Labor Council, AFL-CIO. "The reality is, in terms of the ability to sit down and negotiate on behalf of New York's working people, we have nowhere to go but up.”

 After the economic downturn in 2008, Mayor Bloomberg reallocated most of the city’s $1 billion labor reserve – the money set aside to pay for regular cycles of municipal raises – to close persistent budget gaps. And unions refused to accept the contracts he subsequently offered them – no raises, yet demands for more health care contributions.

 “What we’re on the cusp of, we’re expecting the new mayor to at least begin to struggle to remedy a circumstance in which for over three years the workers across the city have seen zero, zero, zero,” says Michael Fabricant, professor at the Hunter College School of Social Work in Manhattan and a union organizer. “Contrasted to other cities and the private sector, this certainly has not been comparable.”

 But though Bloomberg leaves the incoming de Blasio administration with a balanced budget, the city faces a $2 billion shortfall for fiscal 2015. And with a depleted labor reserve, it may be very difficult for the incoming mayor to finagle the budget and find the money unions believe they deserve.

 And in theory at least, they are demanding retroactive raises, which, if paid in full, would cost the city an estimated $7.8 billion, more than 10 percent of a $70 billion budget.

 “I don’t underestimate how difficult that will be,” says Barbara Bowen, president of the Professional Staff Congress at the City University of New York, which represents 25,000 faculty and staff members in the 23-college system. “But if the de Blasio administration is interested, as they are, in addressing inequality, then a really important place to start is fair union contracts, and those million people who depend on those incomes,” she says, referring to the city’s municipal union members and their families. “And I think that will be on the agenda.”

 But the incoming administration may not be able to do much. “Because much of that is going to take the money we don’t have, or the money the governor says he’s not going to give him,” says Ms. Zaino.

 Indeed, de Blasio has indicated he does not want to raise property taxes in the city – the only revenue-raising power the mayor has. His proposal to raise the city’s income tax on New Yorkers making a half million or more is meant to fund pre-Kindergarten and after-school programs for the city’s public schools – and it requires the approval of New York Governor Andrew Cuomo, who has been tepid on the idea.

 And de Blasio himself has ruled out full back raises, while at the same time refusing to say whether union members should contribute more for health care costs.

 “We have to balance our budget,” de Blasio said to reporters during a Sept. 18 breakfast honoring labor leaders in Harlem. “Everybody in labor knows it. We're going to have to find cost savings. And that $8 billion figure [for] full retroactive pay, I've said very publicly, that's not happening. I hope to do something, if we can, on retroactive pay but we're not going to be able to do the full amount.”

Still, given the new direction de Blasio has signaled for the city, union leaders anticipate a lot more from this administration than they have in 20 years. And since what happens in New York often provides a template for many cities across the country, next year’s contract negotiations will provide the first spotlight on de Blasio’s progressive leadership, and the first test on whether his policies will have an effect the nation’s broader political climate.

“Our hope and expectation is that Bill de Blasio will not only be a spokesperson in New York City, but he’ll be a spokesperson nationally for those kinds of questions,” says Professor Fabricant.