MAYOR’S BUDGET MATH DOESN’T ADD UP
“The
Mayor’s math doesn’t add up. The facts are clear, not only will the
next Administration not inherit a balanced budget but it will also be
greeted on Day 1 with a fiscal
mess of historic proportions – 300,000 employees working with expired
contracts.
“Mayor
Bloomberg’s final budget modification continues to conceal huge fiscal
risks and rely on one-shots like selling City property and depleting the
Retiree Health Benefit
Trust. His budget may seem balanced on paper, but the fiscal reality
points to multi-billion-dollar budget gaps on the fiscal horizon.”
Background:
There
is a multi-billion dollar budgetary risk associated with the fact that
all City unions are currently working under
expired contracts. The Bloomberg Administration’s negotiating position
with the unions does not include retroactive pay for any contract
settlement. The current financial plan includes funding for a settlement
of a five-year contract in which the first three
years would have no increases followed by two years of 1.25% increases.
The unions have all rejected this proposal. Any wage increases above
and beyond the funding already in the financial plan would need to be
funded through increased revenues or decreased
services.
An
analysis by the Comptroller’s office has found that if all unions
agreed to a minimal 1% increase a year over the five-year
term of the contract, the City would need to fund $1.3 billion in retro
pay. If the wage increase were instead linked to inflation, this
number could balloon to $3.1 billion. These numbers are on top of the
potential $3.5 billion in retroactive wages that
the United Federation of Teachers (UFT) and the Council of School
Supervisors & Administrators (CSA) members are seeking.
NYC PENSION FUNDS CALL ON ADVERTISIN
As Two Ad Firms Prepare for Mega-Merger, NYC Funds Ask Them to Disclose Their Employee Composition and Demonstrate Diversity
City
Comptroller John C. Liu today announced that he has called on the
boards of two advertising firms, Omnicom (NYSE: OMC) and Publicis Groupe
(PUB: FP), to disclose the makeup of
their employees across a range of titles by gender and ethnicity before
shareowners vote on their proposed merger.
“These
companies operate in an industry with an abysmal record of hiring and
promoting women and minorities, particularly African Americans.
They claim they care about diversity and are making progress, but
unless they disclose the actual makeup of their employees it’s
impossible to know whether it’s just empty talk,” Comptroller Liu said.
“Studies have demonstrated that workplace diversity leads
to innovation and innovation increases value. We want these firms to
prosper by hiring the best and brightest and we expect them to
demonstrate that they pay more than lip service to equal opportunity
employment.”
The
advertising industry, like the financial services industry, has a
history of wide and pervasive employment disparities, particularly among
senior positions. One 2009 study found that racial disparity is 38
percent worse in the advertising industry than in the overall U.S. labor
market, and that the “discrimination divide” between advertising and
other U.S. industries is more than twice as wide
as it was 30 years ago.
Omnicom
and Publicis have both declined Comptroller Liu’s past requests that
they disclose the composition of their workforce by race and gender.
The pending Omnicom-Publicis merger heightens the need for disclosure.
The merger will not only create an advertising behemoth; it will create
the least transparent major ad firm in the world, by combining the two
firms that have consistently refused to demonstrate
their commitment to equal employment opportunities.
Despite
the companies’ assurances that they have existing diversity programs,
their refusal to provide employment data makes it impossible
for shareowners to determine managements’ effectiveness in this
important area. Meanwhile, the other global ad giants, Interpublic
(NYSE: IPG) and WPP Group (WPP: LN), have taken steps to disclose annual
data on the diversity of their employees.
BACKGROUND
In
Nov. 2011, on behalf of the NYC Funds, Comptroller Liu wrote several
advertising firms — Omnicom, Publicis, Interpublic, and WPP — to ask
they disclose employment data.
When
Comptroller Liu filed this request in the form of a shareholder
proposal at Omnicom, the company tried and failed to exclude it from
their
2012 annual meeting. At that meeting, 33.8% of voting shares backed
the NYC Funds’ proposal, which was the highest ever vote on such a
proposal. Despite broad shareowner support, Omnicom declined to provide
employment disclosures even as its peers have done
so.
Comptroller Liu and the NYC Funds have also engaged numerous financial services firms — Goldman Sachs (NYSE: GS), MetLife (NYSE: MET), AIG (NYSE: AIG), BNY Mellon (NYSE: BK), and US Bancorp (NYSE: USB) — all of which subsequently agreed to provide comprehensive employment disclosures.
The NYC Pension Funds hold a combined 829,714 shares in Omnicom and Publicis with a market value of $61 million.
