Monday, September 03, 2007

Labor Day Thoughts / Rant

Labor Day is a bit of a throwback to a time when "labor" was synonymous with unions and trade guilds, and those organizations wielded real power in this country. Oregon was the first state to declare the first Monday in September a "workingman's holiday" in 1887, and 23 other states followed suit before Congress made it a federal holiday in 1894. This was a time of epic clashes between the labor movement and the leading industrialists of the day, when policemen and National Guard troops were regularly called upon to violently break up strikes and demonstrations, and when the judicial system was overwhelmingly in the businessmens' corner, as evidenced by the death sentences handed down to seven labor leaders following the Haymarket Riot in Chicago in 1886. Slowly, though, progress was made: the unions prompted legislation that outlawed the most abusive employer practices, pay steadily rose, and even long time dreams like the eight hour workday became reality by the 1930's. The middle class bloomed, and the American Dream as we know it today was born.

Of the American workers celebrating Labor Day this year, a rather small minority are actually members of a union. Most are utterly ignorant of the fact that the pay and working conditions they enjoy are largely due to the early efforts of the labor movement. Many are openly hostile to unions and cheer their diminished influence.

The airline industry is a pretty good example of the malaise that affects trade unionism in this country today. The deck has been stacked more heavily against us than any time in the last 70 years. The problem starts with the antiquated Railway Labor Act of 1926, which has governed labor relations at airlines since 1936. Back then, the regulated and localized nature of railroads and airlines meant that strikes could be crippling for a region's economy, and Congress decided that it was in the public interest to ensure that strikes happened infrequently and with plenty of notice. Under the RLA, contracts never expire, they merely become amendable. Negotiations can stretch on for years and years; unions can strike or companies can impose contracts only after the National Mediation Board declares a stalemate and releases the parties to self-help following a 30-day cooling off period.

Under the current administration, the NMB has been utterly unwilling to do this even in the most helplessly deadlocked negotiations. The result is that when unions are looking for contract improvements, management can stonewall them for years on end without any real fear of a strike. You'd think this would work both ways, so that management would have a harder time getting what they want, but they found a way around it. Airlines have recently found bankruptcy courts quite willing to release them from their obligations under the RLA while holding the unions to theirs. The result has been the absolute destruction of everything our predecessors fought so hard to build: the decimation of payrates, the elimination of work rules, the frittering away of pensions, the farming out of many mainline jobs to lowest-bidder regional airlines that pay their own pilots far less and work them harder.

Consider that pay is considerably lower at many carriers than it was 10 or even 15 years ago. Think about how much food and gas have gone up in that time. Think about how much more expensive it is to buy a house. If that doesn't make you mad, think about how much more airline executives are making now, despite continued dismal performance on their part.

Perhaps you think I'm being melodramatic. "Pilots have always had to pay their dues," you say, "and at the majors pilots still made a decent living compared to the average joe." OK, the dues paying aspect has always been there, but paying your dues never used to involve contributing to the destruction of the mainline job you're seeking! And "good enough" is no mentality to have, because then it will be continually defined downward. At which point is it not good enough? $65,000 a year? That's what Skybus is paying A319 captains right now! At what point do you realize that it's insanity to go $30,000-100,000+ in debt for a job that doesn't pay enough to get out of debt, much less build any sort of financial independence or even save for a freaking retirement since that's no longer provided for you!?

This really pisses me off beyond words. This is not what I signed up for! The industry has always been cyclical, sure, and I'd be fine if I thought this was all one bad downturn, but airline management has been busy making sure the downturn is permanent so far as our careers are concerned! Most recently they've been busy getting the next generation of 76-100 seat jets flown by "regional" pilots at craptastic wages. In a few months I'm going to be flying a 76 seat, 85,000 lb MTOW jet for $23/hr as an FO and $61/hr as a Captain. It kills me knowing that I'll be making less as a Captain than the FOs on the DC-9 it's replacing. I would so much rather be flying this airplane at mainline. What's scandalous is that senior mainline pilots signed off on this turkey. Gee thanks fellows - why don't you extend your career another five years since you've done such a crack-up job with it thus far?!

There's good news on the horizon, though, and it's from the source you weren't guessing: the good 'ole free market. Management had you believing it only worked in their favor, didn't they? Turns out people can do the math, and fewer and fewer of them are willing to ante up serious wads of cash for a career that's looking less lucrative every day. The regionals are suddenly desperate for pilots. The worst ones can't fill their classes with enough fresh meat while requiring a mere multi-commercial ticket! Worse yet, the majors are hiring all the experienced captains, and the current FOs don't have enough time to upgrade because they were hired with 1000 hours or less! At this point, the only way of growing a pilot group is by poaching from other regionals, and several carriers are offering signing bonuses of up to $5,000, adding to the bottomfeeders' misery. How do you like THEM apples, Jon Ornstein!?! Reap the whirlwind, sucker!

I really think the key to fixing the majors is fixing the regionals. Most of the current major airline guys - especially the senior ones - are too myopic to realize this, so it's up to us young guys and gals to save our profession. This pilot shortage gives us a rare opportunity because it takes away management's greatest weapon at the regionals. They can't shift our flying to other regionals if our costs go up because none of the other regionals can find enough pilots to expand significantly! The only place to shift flying is back to mainline, which would be A-OK by me. This is the time to push hard and squeeze the weasels!

The ASA pilot group has got the fire in their belly. They've been negotiating a contract for five freakin' years now, and management won't budge. The NMB is refusing to release them, so they're taking matters into their own hands. They're only showing up for work if they're 100% fit to fly, they're taxiing at extra-safe speeds, flying the contract down to the last letter, not doing anything not specifically required of them, and not leaving unless the aircraft is 100% airworthy. Reliability is therefore in the toilet, hurting management where it counts: the bottom line. Good on them! The main problem with this route is that it leaves the union open to charges of sponsoring an illegal work action in contravention of the RLA. That same sort of thing earned AA pilots a $40m fine for a sickout back in 1998. I don't think the ASA pilots really care at this point, but only because they've been pushed so far. Industry wide, not many pilots are upset enough to engage in CHAOS; many also hesitate to use such tactics because they hurt paying passengers.

I have an alternative idea that I've been thinking about for a while: a hiring moratorium. This would intensify the effects of the pilot shortage. When a regional is at a critical junction in their negotiations and management isn't budging and the NMB won't release, the carrier's ExCo or MEC should declare a hiring moratorium and request of all pilots that nobody show up for new-hire class. As a carrot, those who get hired but don't attend class would be paid a "non-signing bonus" or stipend out of a fund set up by the union. As a stick, those who do show up would be considered the equivalent of scabs and existing pilots would be expected to treat them as such. In the current environment, it wouldn't hurt up-and-coming pilots because plenty of other airlines are hiring. Management would quickly find themselves starved of pilots and canceling a ton of flights with devastating consequences for the bottom line. Meanwhile current pilots collect their paychecks and probably some good premium pay as well, making this tactic more sustainable than a strike. Best of all, it's not an illegal work action because the only action is being taken by pilots not yet on the property!

Obviously, this idea wouldn't work in an environment like right after 9/11, when work was rare enough that a new pilot might accept the stigma of "scabbing" to feed their family. But in an environment like our current one, I think it could work wonders in pressuring management back to the bargaining table since the NMB is failing to do so. We need fresh ideas; this is perhaps one of many. We're at a critical juncture for our profession; the time to act is now.


Fred said...

Wow, Sam, tell us how you really feel. Anyway, I'm happy to see the horizon's clearing up for pilots.
However, while I can agree that there was a time in this country's history in which Labor Unions were needed to keep the robber barons in check, there is less of a need for them now. I am distinctly an anti-union person these days, believing they cause more harm than good.

Sam said...

We've been over this before with my lengthy "in defense of unionism" post so I won't beat the equine corpse any longer - but I have a very very hard time believing airline management would change their ways and desist in their war on pilots if the union wasn't around. They spend way too much effort union-busting for it to be just for kicks; they have a business purpose in screwing us over that'd still exist without a union.

Mind you I think ALPA has done a whole lot to screw the pooch and they need reformed, badly. But you're not going to convince me we'd be better committing ourselves to the tender mercies of people like Jon Ornstein and Doug Steenland.

Roger said...

``$65,000 a year? That's what Skybus is paying A319 captains right now!"

Sorry but I'll take it--not bad pay for doing something I enjoy doing as a hobby. I'm just a private pilot but I'd be willing to contract with an airline to commit to the expense and training if they guaranteed me a job as a A319 when I finished. It's less than I currently make as a research physicist but there are additional perks that come with being an airline pilot (e.g., the love of flying and travel.)

Like any job, if it's not what you ``signed up for," then do something else; people make career changes every day.

Roger said...

Make that a job as a A319 pilot.

Sam said...

Funny how it's always the PPLs who say that. People begin to change their tune once they've sunk real money and effort into their career, and especially once they've had a few close calls in the real world of flight instructing & freight dogging.

Ryan said...

Yeah. If you want to make real money in the airline business, become a CEO. It unfortunate, but real. Very sad to see pilots work for 35+ years and provide incident-free service to a company, only to lose their pensions, while CEOs spend less than 3 years at a company, and take millions. SWA might be a good move for pilots.

Fred said...

I take your point, Sam, I just don't completely agree with it.

Ryan: To extend your premise a bit, it can be said that "if you want to make money in any business, become a CEO." But that doesn't make much sense now, does it?

Anonymous said...

"OK, the dues paying aspect has always been there, but paying your dues never used to involve contributing to the destruction of the mainline job you're seeking! And "good enough" is no mentality to have, because then it will be continually defined downward."

A point that most younger/ less experienced pilots fail to grasp. I couldn't agree more. An excellent bit of blogging- keep up the good work,
Rob (CRJ Pilot)
(I'm posting this anonymously only because I don't know how elso to do it.)

Anonymous said...

``$65,000 a year? That's what Skybus is paying A319 captains right now!"

this is a training airline, if they don't raise the pay, pilots will get the type/time and move on. I doubt this airline can continue as a stepping stone airline for pilots to build time and experience... if they continue they will never last.......besides everyone is hiring and start pay may be low $50k, but next year your well above $65k...

Mike said...

Great post Sam.

In Australia at the moment we have the same issues, albeit with a different industrial relations environment.

Qantas needs 300 new second officers in longhaul in the next 2 years. Last year only 190 new commercial pilot licenses were issued in Australia.

So QF is pillaging the regionals and the military, the regionals are pillaging GA in general and everybody is pillaging the instructors out of the flight schools! Add to that the "low cost" airlines feeding on whoever they can and you have a mess.

But supply and demand should see wages go up - right?

However as someone pointed out in another forum the biggest single impediment to the free market pushing wages up is seniority. Pilots with good seniority don't want to shift somewhere else - even for more money - because they go back to the bottom of the numbers.

The supply squeeze comes from both ends of the game for years aging GA aircraft and high learn to fly costs have stifled demand to learn to fly. At the same time the "dream job" has looked ever less like a dream.

In Oz the partial solution to the first part has been Recreational Aviation with a huge upsurge in pilots learning to fly in Tecnams, Jabirus, CTs and the like and then transitioning - if they wish- quite cheaply to a PPL in a C172 or the like. There is therefore a swelling of the ranks at the bottom. You have talked so well about the problem at the other end though.



joaquin said...

Great post, Sam.

With regards to Fred's comment, I used to think that way. I don't anymore. I just finished my first month as a CFI, and two weeks ago I had my first experience taking over from a student (an already licensed pilot) who had put the airplane in a dangerous situation that would have resulted in a bent airplane (at the very least). As I reflect on the fact that, as PIC, I would have been responsible for any damage or injury, the fact that I was paid $24 for the 1.5-hour flight is sobering. As a career-changer myself, I understand the value of job satisfaction, and can relate to the feeling that I might still fly if I were paid less. But I have to temper that with some pride for the service I provide - we pilots are highly trained professionals who make serious decisions that affect people's lives, and we deserve to be well paid. $65K for a A319 captain is pathetic.

Also, I want to avoid the rampant burn-out and disillusionment that seems to infect so many pilots once they actually start working professionally (as contrasted with the enthusiasm and positive outlook exemplified by most student pilots). Improving pay and working conditions would be the best thing we could do to help that syndrome. Sure, money's not everything in life, but being ripped off or taken advantage of eats away at your soul. Flying a fancy jet is not going to mitigate that.


Anonymous said...

I couldn't agree with you more Sam...this comment is spot on...

"OK, the dues paying aspect has always been there, but paying your dues never used to involve contributing to the destruction of the mainline job you're seeking! And "good enough" is no mentality to have, because then it will be continually defined downward."

I cringe when I overhear student pilots at my flight school talk about getting on with Mesa and the likes. They know it is a crappy job but they define it as "paying your dues". How short-sighted! They don't realize that they are screwing themselves by accepting these jobs!

I think someone needs to put out an ad campaign or something to promote this idea and make people aware. Education is the way to salvation everyone. I know the regional pool is dwindling but there are still plenty of starry eye'd kids out there that would give their left nut to fly an RJ for peanut wages because they need to "pay their dues".

Being a 22 year old CFI, I too grew up wanting to be an airline pilot. Unless things change dramatically real soon, I don't think I could bring myself to it. It's a sad state of affairs out there. My sights are now set on corporate/fractional aviation...


Anonymous said...

Sam -

I very much enjoy your posts and insider perspective on the aviation industry. For many years I too was very interested in flying for a Part 121 airline. I made it to a crummy Part 135 operator that went bankrupt about 6 years ago...before 9/11...and decided it was time to change careers. I went to graduate school and now make really great money doing a very boring job. Thus , my perspective is likely a bit different but I would like to share.

I agree wholeheartedly with your comments about the degrading of profession. When I flew for the Part 135 operator we would sometimes park our planes next to United because we would fly some scheduled service. One summer United pilots were engaging in some sort of preemptive job action that caused huge problems for the paying customer. This was done in order to get management to bow to their will...which management of course did due to the nature of management / labor relations in the late 90's. It was obvious to me that the idea of (permanently??) damaging your business in order to extract additional compensation is a tough way to yield long-term profitability for a company. United, again as an example of greater industry problems, was on very shaky ground pre-9/11 because of this issue and the general economic downturn. Fast-forward to now when the labor / management dynamics have changed and it almost seems as if the tables have turned with management engaging in the same behavior as labor did...with similar results. Labor and management are again angry with each other but the outcome is likely going to be the same...the customer will suffer the most. I don't think, however, that the labor / management issue is the biggest problems facing the piloting profession today. Instead, it's a lowering of the bar for entering the profession. A few comparisons may be in order...

Several (many, many) years ago, being a professional pilot required the same training and experience (including "paying dues") as was required for many top professional jobs such as law and medicine. Although graduate-level degree wasn't necessary many pilots had solid 4-year degrees from reputable universities and many, many years of experience prior to sitting in the front of a turbine or jet powered aircraft. The education requirement allowed the pilot profession to be viewed akin to other advance, white-collar professions and thus the pay rates were comparable. In more recent times the level of required education and training necessary to fly jet-powered aircraft has been lowered to almost nothing. The large sums of money necessary to obtain FAA certification are readily available from Key Bank and other similar outlets. Large flight training academies (not universities) are now becoming the norm for many who wish to enter the profession. No reputable college degree is required even for jobs at major airlines. Thus, the profession is now viewed more like other blue-collar jobs that require training and not education. I think that many pilots being recruited to airlines are now much more likely to be hard-working men and women who would be police officers, firefighters, etc. if flying wasn't an option instead of training for advanced professional careers such as law and medicine. Ultimately, I think that pay rates for the piloting profession will more closely mimic pay rates for law enforcement and emergency services than higher-paid professionals. Before you argue that pilots are tasked with operating multi-million dollar machines that require precise skills, realize that society allows young men and women to carry and use (intentional) deadly force everyday...and they're paid less than $65,000 even at the top of their pay scales. Also, automation has reduced the actual "stick and rudder" skills necessary to effectively maneuver expensive airplanes around the sky. Regulation and training are obviously sufficient, at least in the US, because aviation accidents and incidents are very rare even with young, inexperienced pilots warming the right seat.

Ultimately, I think that you are correct in asserting that the free market will bring up some wages at the very bottom. I think that realistically, however, the days of top wages for pilots are gone. Southwest, for example, will just not be competitive if they don't do something to reduce labor cost...we can save that discussion for another day. I hope that my assessment is proven wrong because almost every day I wish I could be in the pointy end of any jet I see pass over my city while I'm on the way to or from my office. Sadly, I have concluded that aviation is not a good place to earn a living now. I am not hopeful that it will be in the future either...but I have chosen to change careers away from the industry. If I'm wrong (again, I really hope I am) I'll jump back in. For now I'm just one of the cattle being herded into the back...jealous of you sitting up front.

Thanks again for the great blog and comments. I truly do appreciate reading all that you write. Enjoy the Twin Cities!!

Anonymous said...

Sam, I totally agree with most of your sentiments, but the suggested get-paid-by-the-union-to-not-show-up just couldn't work. Management could easily just start hiring dozens of low-timers to quickly suck the union dry and the day it stops they only have to sink a whack extra training $ into the low-timers and they've bankrupted the union in one fell swoop.

Work to rule is a very viable tactic, but it takes the enthusiastic participation of every single member to work. Its very hard to look your boss in the eye and feed him some B.S. excuse for why he will have buy hotel rooms for dozens of angry customers tonight.

roger said...

``People begin to change their tune once they've sunk real money and effort into their career"

Yes, but that's just the facts of life. I just read the following:

``George Washington University became the first college to break the $50,000 mark when it approved for the class of 2011 tuition of $39,210, a food allowance of $3,400 and housing prices of $8,500."

That equates to $200,000+ for a four-year degree. It's a crap shoot--you may get the high-paying position to pay your tuition investment off or you may not. The same thing goes with flying but with one difference. I've yet to meet a professional pilot (and I'm friends with a couple in the majors) that chose the job for the money. As one friend so eloquently stated when he was hired by US Airways, ``I may be at the bottom of the food chain but at least I'm in it!" The reality is that they took the job because they LOVE to fly. That's ultimately why a pilot's union was necessary; there are more people that love to fly than available positions. This illustrates the supply and demand situation where companies can pay less because there is more supply than demand.

``we pilots are highly trained professionals who make serious decisions that affect people's lives, and we deserve to be well paid."

Yes but as a physicist, I too have a job whereby I make serious decisions that affect people's lives. I also happen to be well paid because there is a larger demand for physicists than supply of people with the mettle to finish graduate school. As a private pilot (with a rotary wing endorsement--which is a bit more challenging), I agree that pilots are well trained but I'm also aware that many people are capable of passing the training--I meet them all the time. Yes, airline pilots should be paid a decent wage (and I'm sorry, $65k is decent since the Bureau of Labor Statistics reports the average annual wages in the U.S. as $36,764 for 2002. The job is one in which those who do it, love what they do--and thus creating a larger potential supply than demand.

The only reason the pilot's union exists is to create a false scarcity of a resource that isn't scarce. Airlines obviously can't afford to hire the person at the bottom of the barrel that will take the lowest wages since the lawsuits from a few major accidents would drive them out of business (e.g., Pan Am and it really wasn't even their fault--so imagine NTSB ruling of an incompetent pilot.) The bottom line is that when dealing with the pool of qualified pilots, the individual who wants the job the most is usually willing to take less pay. This lowering pay scale will eventually start to decrease the supply of qualified pilots who are unwilling to undertake the initial training expense and the pay will have to rise accordingly. Eventually, you hit the point that exists in most career options--some people get hired doing what they paid to learn while others don't. I’ll propose a question, what happens to those pilots who also have invested much time and money into the profession but never land that first airline job (especially when it is because of union hiring rules)? Why should they be left holding the bag?
I realize that I’m challenging your profession. Desiring high wages is understandable and the responsibilities associated with being a professional pilot is undeniable but as long as there are qualified people willing to do the job for less, they should have the right to accept the job at a rate that balances their desire to fly with the need to make a living. Current pilots have to balance the same interests. You are obviously already doing that because you continue to fly at what you consider to be poor wages. I'm honestly curious, how low would the wages have to go for you to decide to give up flying as a profession? Now, do you suppose that their are others who would go lower?

I understand your position and I wish you the best in your chosen profession but I honestly suspect their are other CFI's waiting to take your seat should you ever decide to vacate it.

roger said...

Sorry for the additional post but Anonymous hit upon a good solution. Instead of resorting to coercion, why doesn't the union demand that all professional pilots hold (at minimum) a degree in a technical field (e.g., aeronautical engineering.) This would lower the number of qualified pilots so the pay would raise due to the lowered supply. It would only be fair; however, if current pilots were bound by the same rule.

Aviatrix said...

People have to realize that pilots work for subsistence wages for years, and MUST retire at sixty, so the captain's wages have to make up for what the pilot isn't able to save between twenty-five and thirty-five (and hence earn interest on for the rest of his career) and what he isn't able to earn at all between sixty and sixty-five.

I'm not getting rich now, but I found out that I make now more than a *captain* is paid at the company that was unable to continue my employment as an FO, this spring.

So I'm not an airline pilot, but I fly an airplane and make more than an airline captain.

I win. :-)

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