Originally Posted by
FullWinger
Not sure how inflation normally plays into negotiations. This is my first airline contract with a union and just came off probation so I've been reading these threads. Inflation keeps coming up but I don't know how unions address inflation in the middle of a contract. Isn't inflation a snapshot in time that goes up and down? If contracts go on for 3, 4 or more years pay isn't changing except for a few percent raises each year. A contract is a moment in time and things are changing. I know my circumstances for my family since my wife's income varies each year with bonuses and stock prices.
The problem is the RLA which prescribes a long circuitous path before allowing a (generally very brief) strike coupled with the fact that seniority eventually locks you into one employer which inhibits your ability to move to the highest bidder as well as the ability of management (because of the RLA) to stretch things out for years, benefitting from the fact that even if they eventually do raise rates, they have benefitted from the time value of the money (and depending upon the payback period the money itself) they saved by not bargaining in good faith until forced to the table.
Now in years of 1-2% inflation, that’s bad enough (typically compounded over 3-4 years) but we have entered a hyper inflationary era. No, we aren’t seeing DAILY 20% spikes in inflation like Argentina or the Weimar Republic, but we have MASSIVELY expanded the money supply without expanding goods and services so that’s going to drive things up for awhile.
image uploader
https://www.npr.org/2021/11/19/10569...ast-presidents
You may read back about the Nixon-Carter era (in fairness to Carter, Nixon’s wage and price controls set him up for disaster) but it really doesn’t matter what CBAs have done in the past, because the only way pilots can hold their purchasing power when you are seeing annual inflation rates of 6-8% is to incorporate some sort of an inflation index into the contract.