TCB July 2025

As I write this, trash is accumulating on Philadelphia's streets for the first time in nearly four decades. AFSCME District Council 33, representing approximately 9,000 of our city's essential workers, has begun its first strike since 1986. The immediate impacts are visible and visceral: overflowing dumpsters, closed pools, strained emergency services, and the logistical challenge of 63 temporary drop off sites trying to manage the waste of a city the more than 1.5 million people.

But beyond the headlines and the inconvenience lies a deeper question that goes to the heart of how we organize civic life in the 21st century. What is the true value of public service, and how do we balance the legitimate needs of public workers with the fiscal realities facing cities across America, especially in the context of the current presidential administration? 
 

The Economics of Essential Services 
 
The current strike illuminates something economists have long understood but policymakers often overlook: the irreplaceable nature of certain municipal services. Unlike private sector strikes, where competitors can potentially fill gaps or consumers can delay purchases, a municipal strike reveals the monopolistic character of local government services. When sanitation workers walk off the job, there is no alternative provider. When 911 dispatchers strike, public safety hangs in the balance.

This reality creates what economists call dual monopsony, a situation where a single buyer (the city) faces a single seller (the unionized municipal workforce). Wages and working conditions are always and everywhere a function of the power dynamics between buyer and seller, but in a dual monopsony in the context of a public good, the negotiation becomes a political struggle par excellence. What we are witnessing is a complex public battle between the needs of workers represented by their union and those of the broader tax base, represented by the mayor - with the caveat that unlike a private union negotiation, the workers are also taxpayers and voters, part of a union that also plays a significant role in local politics.

The union's demands, an 8 percent annual wage increase over four years and expanded healthcare benefits, must be understood within this context. While these numbers may seem substantial in the abstract, they reflect workers' attempts to capture what they perceive as their fair share of the value they create through essential services that cannot be outsourced, automated, or eliminated. They also must be understood in the context of the recent period of high inflation nationally and upward pressures on housing costs in Philadelphia. 

Lessons from History 
 
The last DC 33 strike, in 1986, lasted twenty days and left lasting impressions on both the city's collective memory and its approach to labor relations. That strike occurred during a different economic era, one in which Philadelphia’s municipal finances were in far worse shape. Today's fiscal landscape is markedly different.

Philadelphia, like all so-called “post-industrial” cities, operates under constant fiscal pressure. The city’s finances have been well managed since the 1990s, and they have recently turned several important corners: the PICA bonds that helped the city avoid bankruptcy in the 1990s have finally been paid off and the massive legacy pension obligations of the Rizzo era are less than a decade away from being discharged. Nevertheless, in the next decade the budget share represented by pension obligations are still substantial, and with the fiscal uncertainty induced by the Trump administration, especially the just-passed federal budget bill, all cities will feel the consequences of Medicaid and SNAP cuts, especially those with large poor populations like Philadelphia. Social service demands have only grown in the wake of the pandemic and ongoing housing crisis, the city’s deferred infrastructure needs are enormous, and both SEPTA and the school district need augmented local support if they are going to adequately provide for the needs of the city. Against this backdrop, every budget decision involves trade-offs that affect real people's lives and the vitality of the local and regional economies. Add the additional layer of complexity represented by the Trump administration’s moves to strip research institutions – the core of Philadelphia’s ed-and-meds economy – of federal funding and the campaign to deport millions of immigrants, who have been the prime driver of Philadelphia’s population increase in the past 25 years, and the tough choices faced by the mayor become exponentially tougher. 

Of course many of these same fiscal pressures have been borne by the very workers now on strike. Public sector workers have often been asked to accept wage freezes, benefit reductions, and increased workloads as cities have tightened their belts over the past four decades.  Many of Philadelphia’s municipal employees earn well below what the MIT Living Wage Calculator estimates to be the minimum income for a single person without kids to live a dignified life in our city, roughly $48,000.  Our analysis of municipal employee wage data suggests that as many as 20% of full-time municipal employees earn less than $48,000.  And with the looming cuts to public benefits in the federal budget, life is only going to get harder for the bottom quintile of the income ladder. 

The Broader Urban Challenge 
 
Philadelphia's strike is occurring within a national context of labor resurgence and municipal fiscal stress. Cities from Chicago to Los Angeles have faced similar challenges as public sector unions, empowered by tight labor markets and renewed public support for organized labor, have become more assertive in their demands. At the time of this writing, Boston is also facing a trash strike, albeit one called against a private trash hauler, Republic Services, contracted by Boston and other contiguous municipalities.  

This trend reflects a broader reconsideration of the relationship between labor and capital that extends far beyond municipal government. However, it also highlights a particular challenge for cities. Unlike private employers who can potentially pass increased labor costs to consumers through higher prices, municipal governments must either raise taxes, cut services, or find efficiencies, options that each carry significant political and practical constraints.
 

The timing of this strike, just days before the July 4 holiday and the city's major Wawa Welcome America festival, adds another dimension to consider. Cities increasingly depend on events, tourism, and their overall image for economic vitality. A prolonged strike that affects the city's ability to manage large public gatherings could have economic reverberations extending well beyond the immediate costs of the labor dispute. And the decision by Welcome America headliners LL Cool J and Jazmine Sullivan to pull out rather than cross picket lines added even more urgency and complexity to the negotiations.  

Innovation in Municipal Service Delivery 
 
One unexpected outcome of the current strike may be experimentation with new approaches to service delivery. The city's rapid deployment of 63 temporary drop off sites, while clearly a stopgap measure and critiqued by many as a union-busting tactic, demonstrates a capacity for logistical innovation that might not have been explored otherwise. Similarly, the cross training of Water Department employees and the deployment of police officers to 911 operations shows organizational flexibility that could inform future planning.

This is not to suggest that strikes are necessary catalysts for innovation, but rather to note that crisis often reveals both vulnerabilities and capabilities that are otherwise hidden. Smart municipal leaders will study what works and what does not during this period, potentially informing more resilient service delivery models for the future. 

 
The Technology Question 
 
Notably absent from much of the current discussion is the role of technology in municipal service delivery. While automation has transformed private sector industries, municipal services have remained largely labor intensive. This is partly by design because public employment serves important social functions beyond service delivery, but it also reflects the political sensitivities around replacing public workers with technology. 

Yet cities like Philadelphia are already experimenting with smart waste management systems, predictive maintenance for infrastructure, and digital platforms for citizen services. The current strike raises questions about how technological innovation can complement rather than replace public workers, potentially making their jobs more efficient and valuable while improving service quality. 
 

Civic Solidarity and Shared Sacrifice 

 
Perhaps most importantly, this strike tests Philadelphia's capacity for civic solidarity. The temporary inconveniences, hauling trash to drop off sites, modified pool schedules, longer wait times for city services, are shared burdens that remind us of our interdependence. How we respond to these challenges, how we treat both striking workers and the civil servants trying to maintain essential services, and how we engage in public discourse about these issues will shape not just the outcome of this particular dispute but our broader civic culture.

The concept of the civic contract, the implicit agreement between citizens and their government about what services will be provided and at what cost, is being renegotiated in real time. This negotiation is not just happening at the bargaining table between city officials and union leaders. It is happening in every conversation among neighbors, every editorial and social media post, every decision about how to respond to service disruptions. 

Looking Forward 
 
As negotiations continue, all parties would benefit from remembering that the ultimate goal is a sustainable system that provides quality public services while respecting both fiscal constraints and worker dignity. This may require creative solutions that go beyond traditional wage and benefit discussions.

Could the city explore innovative benefit structures that provide workers with greater security while managing costs? Might there be opportunities for productivity improvements that benefit both workers and taxpayers? Are there ways to align worker compensation with service quality metrics that matter to residents?

The Economy League has long advocated for data driven approaches to municipal challenges. While labor negotiations are ultimately about human relationships and political power, they can be informed by better data about service costs, worker productivity, and citizen satisfaction. Whatever the outcome of the current strike, Philadelphia would benefit from more systematic approaches to measuring and improving the efficiency and effectiveness of municipal services. 

The Path to Resolution 
 
Ultimately, this strike will end. The question is whether it ends in a way that strengthens or weakens Philadelphia's capacity for effective governance and service delivery. The best outcomes will likely involve recognition on all sides that public service is both a calling and a job, that fiscal responsibility and worker dignity are not mutually exclusive, and that the true measure of success is not who wins at the bargaining table but how well the city serves all of its residents. 

 
The Economy League remains committed to supporting evidence based approaches to these challenges, whether through our ongoing research on municipal finance, our work with public sector employers through PAGE, or our efforts to build civic leadership through GPLEX. These challenges require all of us, labor, management, elected officials, and citizens, to think creatively about how to build a more equitable and sustainable Philadelphia. 

 
In the meantime, we encourage all Philadelphians to approach this situation with patience, empathy, and a commitment to civil discourse. The workers on strike provide essential services that make our city function. The managers trying to maintain operations during the strike are working under extraordinary pressure. The elected officials negotiating a resolution face genuine constraints and competing priorities. None of these roles is easy, and all deserve our respect as we work through this challenge together. 

 
As always, the Economy League stands ready to contribute data, analysis, and facilitation to help our city emerge from this crisis stronger and more resilient than before. 

 
Jeff Hornstein, PhD 
Executive Director 
Economy League of Greater Philadelphia