The impact of the 1975 New York City financial crisis on public sector unionism.

Abstract

Using New York City's 1975 financial crisis as an example, this article argues that the classic inelastic theory of wage demand for public sector employment (higher wages do not lead to reductions in employment) has been supplanted in the mid-1970s by a kinked demand relationship (the idea that higher wages can and do lead to reductions in employment), wherein unions can improve wages for their respective memberships only by implementing strategies that lend themselves to facilitating an increase in overall demand for government services.