That city labor leaders are more reluctant to cough up savings than they are to accept layoffs — a fact pointed up by our Benj. Smith at page 3 of today’s New York Sun — puts into sharp relief the difficult task ahead of Mayor Bloomberg, whose budget so far relies on $600 million in concessions from the municipal unions. Reducing the size of our 250,000-person workforce — one-seventh the size of the federal government — is an important goal. But it is just one of the goals that the mayor would be wise to be pursuing. Equally important, over the long term, will be wrenching concessions from the city’s public-sector unions. After all, laid-off workers often get rehired in a boom, as part of the boom and bust cycle that plagues all governments, whereas restrained salary increases, tighter work rules, and less extravagant health-care and pension benefits en dure and provide recurrent savings.

So far, Mr. Bloomberg’s negotiation record has been somewhat suspect. With the teachers last summer, Mr. Bloomberg gave a 16% raise in exchange for the modest addition of 20 minutes to the workday — much of which could be taken in useless “professional development” time. With the transit workers in December, the MTA gave $1,000 lump sum payments in the first year and 3% raises for the next two years in exchange for more flexibility in how it deploys workers. With the principals just a few days ago, the mayor gave two consecutive 4% raises and some one-time salary bonuses without any givebacks from the union.

Watching these contracts unfold, it’s not difficult to see how New York City has ended up in a position where, according to the Citizens Budget Commission, about 67,000 out of 80,000 non-managerial civilians — i.e. those who are not teachers, firefighters, policemen, or senior officials — work 35-hour weeks. Fewer than 10,000 work a 40-hour week. The CBC has estimated that if the city were to insist on a 40-hour work week, 12.5% of non-managerial civilians could be cut — about 8,000 workers — for a savings approaching $500 million a year.

Looking forward, the police and the teachers are both seeking significant raises. Even under Mr. Bloomberg’s stingiest scenario — no raises after fiscal year 2003 — all city workers will retroactively receive inflation-adjusted pay hikes of 4% to 6% to cover the period since their last contracts expired in 2000, according to the Manhattan Institute’s fiscal policy expert, E.J. McMahon. And they are also likely, realistically, to do better than 0% going forward. Therefore, the mayor is going to need to find more money somewhere.

One of the main concessions Mr. Bloomberg needs to win is the relatively modest demand that city workers contribute a co-payment to their basic health insurance coverage. It is an aberration from municipal norms that city employees get their basic health insurance coverage entirely for free. New York State workers co-pay 10% of individual coverage and 25% of family coverage. Under the Federal Employee Health Benefits Program, workers co-pay 25% for most plans. Mr. McMahon estimates that if New York City workers agreed to pay the same share of their coverage as federal employees, the city would save $508 million a year by 2006.

Other concessions could include extending classroom hours for teachers and ending paid sabbaticals. City teachers work a below-average day compared to those worked statewide. The city’s Independent Budget Office estimates that requiring a full additional classroom period a day would generate annual savings of $691 million by eliminating the need for nearly 10,000 teaching positions. An entitlement to a one-year paid sabbatical is waste, as teachers can already take the summer off. Mr. McMahon estimates $74 million could be saved by eliminating that perk.

Layoffs are a necessary thing given the current state of the city’s budget. But the mayor will have budgets to balance in the future, so it would be best not to rely on layoffs alone. He needs to build in structural savings.