In trying to settle labor contracts, unions are demanding raises in order to keep up with the rising inflation rate. It is estimated that if these wage increases were granted, the city's budget deficit would be over $5 billion. Mayor Bloomberg says that there is no money in the budget for pay raises and warns that the union would have to agree to major productivity savings in order to finance them. The union responded that workers are already forced to work longer and harder due to recent layoffs, and are reluctant to grant further productivity increases.
See Steven Greenhouse, The New York Times, June 25, 2003