Wage Fallacies
 

In several threads on this and the regional forums, I have seen the suggestion that the goverment step in and mandate that airlines not pay some absurdly low wage to highly trained, highly qualified airline first officers. Some have gone so far as to suggest a dollar amount as an "airline pilot minumum wage". From the offset, it may sound resonable.

In reality, most know that we have done it to ourselves. Quite simply, there exists too large a supply of pilots, not enough sustained demand, and the barriers to entry are too low. Obviously employers prefer to keep costs low, and the most controllable expense is business is payroll. They will lower wages to what they believe the market will bear. Some may tend to offer a slight premium in wage or benefits to boost interest, but since theoretically all pilots are homogenized to the same standards, it would be difficult to ensure that merely a wage increase would ensure the best talent.

Even more reason, some would cry, for the goverment to step in and create a price floor on the commodity of airline pilot. They argue that would give struggling but experienced/talented pilots incentive to remain in the industry. It would guarantee a "livable wage" (words of another poster who must not be alive). Obviously this increase in payroll expense would be passed along directly to the customer, either directly through price, or some form of "fair pay tax".

Perfect! they cry... what's a few extra dollars... I want to get paid! I'm worth it. Well, first every contract would have to be renogotiated.. and with new higher first year pay scales to match the guarantee, it would almost be certain that large structured pay increases would be a thing of the past, ($2 bump on $20 an hour is a 10% raise) a few percent a year at most, perhaps merit-based like every other employer, now that's scary. Of course, big daddy goverment may deem it necessary to step in from time to time and give a little bump to pay.

What about on the other end of the scale. Many banks have been demonized lately for paying out enormous bonuses to high level employees. These aren't just the highest level fat cats, but more junior execs who's salary is based off performance. Ok, so the bank must not have been performing that well if they needed bailout money... but two points 1) Many of those junior execs work for very profitable sections of the bank, and 2) they had abosolutely no say, vote, influence what-so-ever in deciding whether that bank accepted federal bailout. Still bonuses anger the taxpayers, and politicians concerned about votes step in with threats of bonus (read: salary) caps.

My point is, if we allow the government to step in and mandate how much we get paid on the bottom end, what is to stop them from doing the same on the upper end? If they can bypass contract language and re-establish low end pay, why not upper end as well? When you allow the goverment to control your wages, you allow politics and knee-jerk lynch mob mentality to control it as well. Airline in chapter 11? Uncle Sam steps in and cuts your wage to help make the company solvent... or sets a cap on what you can possible earn. What about the next Buffalo, the next Atlanta/MSP, or some other incident? Public opinion sways politician's vote on what you are worth.

Maybe that sounds a little too far fetched of a conspiracy theory for some of you, but I am willing to accept that there will be a lower low end to pilot pay scales than to openly allow goverment to determine what pilots are worth. They already control enough of my wage through taxes.

You are right, our First Officers should have to maintain a second job and live with their parents across the country, increasing the possibility of them showing up tired to fly with me, because in your fantasy land a minimum wage would create some situation where the government would have to step in and limit maximum pay.

Oh wait, the government could step in right now and limit whatever they want...they are the government! One doesn't dictate the other.

If a minimum pilot wage were set contracts would not have to be renegotiated. If the law says pilots must be paid higher than the contract wage, it has to be paid, end of story.

To be opposed to any kind of quality of life improvement for the pilot profession on a political position that, frankly, isn't thought out, is counterproductive.

The thing is, the government has already determined our wage. Its called the RLA, and it has prevented a free-market for pilot wages since 1936!!

I for one believe the government needs to be all-in, or all-out. The current system where you just prevent labor from taking work action, but allow management to do as they please under the pretense that it somehow prevents cities from losing their airline service is completely outdated and downright unfair.

The big evil nasty gubernment needs to fix the mess they already created.

Why is a first year FO paid garbage pay, and a 10 year FO makes some number above that for exactly the same job and level of performance?

Perhaps the government should demand one salary, with cost of living annually, and perhaps a perk for any work done above some baseline hour.

I'll send my idea to the Politicheskoye Buro, comrade.

Well said. However, it totally debuncts the long-standing legend of the impending "pilot shortage" - which ofcourse will never happen.

This should be required reading for all students at ERAU, UND, DCA, Purdue, ect.. to cleanse them of the undoubtable near-leathal quantities of coolaid they're tricked into consuming.

This was discussed ad-infinitum on the regional forum post-Colgan.

Congress will not go there, because we already have a federal minimum wage which does apply even to RLA groups.

Any airline pilot who makes less than minimum wage (based on DUTY, not flight time) can visit his local state labor board and they will force the employer to bring him up to minimum wage for the year.

You could make the case that it is a safety issue, and pilots require higher-then-minimum wage so they are not fatigued by financial stress, second jobs, commuting, etc. The problem here is that there about a zillion OTHER professions which are also safety-sensitive, which would also demand that THEY get a minumum $50K/year or whatever congress gave the pilots. Congress knows better than to go there.

We dont need the government getting involved in setting our minimum pay (or minimum level of experience required, same thing). The longevity payscale is a bunch of crap considering the drastic difference between 1st and 10th yr pay at any airline.

If we all got paid according to how much revenue we bring into the company it would be more sustainable for the pilots and allow the company to expand as well.

Maybe use some sort of formula with RPMs (Revenue Passenger Miles). If you have a 100 seat jet with 80 people on it and you fly 1 mile then that equals 80 RPMs.

The fallacy in your argument is that with a minimum wage, the government wouldn't be bailing out the company, and, thus, has no influence on maximum wages. We have a track record of companies entering Chapter 11 for decades, all of them paying a federally mandated minimum wage, with no outcries from politicians or the public to reduce executive salaries (with the notable exception of the workers of said company). The line that has been crossed, it seems, is when the executives are making unbelievable bonuses when the company is in such mortal financial peril.

I'd like to see one documented example of a company that has NOT received federal bailout money with minimum wage employees entering Chapter 11 (or without C11, for all I care), where the government has stepped in a regulated top salaries at all(successfully as well, not just political blustering), let alone regulated salaries to the point where it would effect a lowly airline pilots salary (which in the scheme of executive pay is low). You show me a documented example of this happening EVER, and we'll talk again.

Bait
 

The airlines use the promise of earning a high wage someday as bait to seduce decades of punishingly low wages out of their workers.

A better plan would be to have everyone know that they will make mailman wages up front. Then no one would be duped into getting into this profession unless they were able to accept the true pay that a pilot makes.

Skyhigh

Maybe airlines can get approved to become Non-profit organizations. I know there are some serious tax breaks to be had with that, and we for damn sure arent making any money!

No, I didn't say that with a minimum wage there wouldn't be bailouts, I made the argument that if the government is permitted to step in and mandate an "airline pilot" minimum wage, it sets a precedent for them to set a cap on pilot wages as well.

As was stated by another poster... they already have enough influence through the RLA.

What was being discussed wasn't pilots making the already existing federal minimum wage, but establishing some new arbitrary HIGHER amount because of the notion that pilots are more special than everyone else, and shouldn't have to hold a second job or live at home with their parents, as Oberon stated.

If you were "duped into this profession" by the promise of big money, and are now upset that it didn't materialize.. then it's up to you to take ownership of the decision you made.

My post was intended to highlight the increased reliance people have on the government to remedy the bad situations or decisions people find themselves in.. and my desire to keep it as far away from my finances as possible.

This is absolutely correct. The "pay your dues" mentality runs deep in the piloting profession. Problem is, many of us have been "paying our dues" for 20-plus years and still no payoff. :(

Simple answer. If FO wages are two low for you, go do something else. Go earn a better living. Stop whining and asking the Government to make your life better.

Wages are based on the marketplace. Entry level regional FOs are paid crap because THEY CAN! They can make 'em like potato chips. Crunch all you want, we'll make more! Maybe, just maybe, the new law requiring an ATP and 1500 hours will change the marketplace. There is your government action.

I don't disagree with your sentiment at all but I can't believe you just lumped DCA in with those institutions of higher learning...:eek:

Remove,

You are, of course, correct. Most pilots I know don't aggree witht he "nanny state." But suddenly when it comes to wages and pilot jobs, we want the government to step in and fix it... without realizing that the RLA is a big cause of why we are in the situation we are currently in. It created, along with airline regulation, the malinvestement of resources (money and pilot interest). It promised more than the career could deliver.

Government action (that is ALWAYS political) does not often have the impact that was intended. In fact, it is usually the opposite (try to reduce poverty-increases poverty). It would be no different in the airline industry.

The Government is not our savior... the evil free market is.

so what are the odds of the government realizing that the RLA no longer belongs in the airline industry?republicans or democrats, I think its zero.

Phuz,

You are right. No chance. It is the status quo and will not be changed. If I remember correctly, Leo Mullin tried to push for some major changes some years ago to the RLA (which of course was not a complete removal, but changes that would only help the airlines).

I don't believe he got anywhere.

So, we will be stuck in the current situation for some time to come trying to make it work and complaining about why we can't get this proffession sustainable... and blaming each other for it.

The fact is the RLA does exactly what it it supposed to do. It keeps labor unrest to the transportation system at a minimum thus ensuring a reliable efficient system. Remember it's all about commerce, not your wages.

Now the loony left wants to tinker with the RLA with respect to ramp and service workers. We may all decry the RLA but imagine a country without it. It's easy if you try, just look at France and Italy. Every other day there is a transport worker strike. Does anybody want that here? Sometimes it's not about you. Like it or not the RLA benefits the nation as a whole. Doesn't do us much good, but it is bigger than us.

Satchip,

I think you are right. The RLA is not there for us... the worker. It restricts what we can do. It is there for a "greater good." The problem with the "greater good" is that it is collectivist thought. And collectivism leads to private property loss. I don't work for the "United States." I don't serve it. I work for a company. My job is to make a profit for that company. If that so happens to help out the US in general (and it does), so be it.

But the view that the government in general needs to regulate the industry for the "greater good" is part of the problem. Because, as I stated before, it always gets political and inefficient. Which is bad for buisness.

I would argue that Starbucks serves the "greater good" (it is a no-go item for me on an early morning) but it doesn't need to be regulated.

let's see, 100 pax times 400 kts = 40,000 pax miles per hour

34 pax times 250 kts = 8500 pax miles per hour

19 pax times 250 kts = 4750 pax miles per hour

You must really hate prop guys.

And here you are correct again. This speaks to my earlier comment about malinvestment. The RLA and airline regulation created an unrealistic industry in which captains were paid fantastic wages (sure would be nice) that could not be supported by a true free market. But we still think we can "get back to the good 'ole days" of 400 dollars an hour.

We used unions and taxpayer money (price regulation) to subsadize our pay an benefits. We are simply in a no-man's land between regulation and free market; it is not pretty.

Hey... here's one.... the airlines and unions agree on a pay and benefits package, as well as scheduling guidelines. Then management can reduce pay, terminate retirement benefits and violate scheduling guidelines, of course subject to the endorsement of the unions.

Oh wait... that one is already out there.... oops.

Yes the RLA does work as intended, absolutely. But we don't need it. Name any non-eas city that would LOSE 121 airline service if any one airline was on strike. In 1936 a single airline strike would have eliminated service to dozens of metro areas and that of course had to be regulated. Todays airline industry is completely different. Most cities are served by at least 2 major brands which subcontract flying to any number of 'regional' outfits. The RLA is a relic, and if the government is not going to step in and help my wage i'd really like it if they would just allow me to help myself. One or the other, this in between stuff doesn't work.

RPMs are based on straight line distance between airports. BOS-DCA is 346miles. LGA-ALB is 118miles.

There would be an RPM formula for each aircraft. Props fly shorter distances but are much more efficient than jets. RJs fly mid stage length, so not as many cycles as a prop, but more than a 777.

Hahah! Good one!!!:D

You failed to see my point. And to answer my question. Can you name a SINGLE instance of the government instituting wage caps on ANY group OTHER than groups having just been bailed out by the government?

In fact, I can name one instance where the exact same thing happened. And it was the ruling of a certain new justice named Sotomayor, later upheld by the Supreme Court, and involved MLB and what essentially were wage caps.

EDIT:
And just so you don't misinterpret my beliefs, I'm not necessarily for a pilot minimum wage, and for quite a few reasons. That being said, to argue that it is because wage caps will soon follow is not one of the reasons.

Oh, I think the airlines have perfected the whole "non-profit" thing.

The RLA has nothing to do with the pay problems. It is the seniority and longevity systems. If either of those two could be transferred from company to company you would see people bail from the low payers faster then they could raise the pay. Even if payscales differ people aren't willing to give up seniority. Also if you have 7 or 8 years of longevity there would have to be a very big pay scale difference to go back to 1 year.

I agree there needs to be portability with our jobs, but if we could take seniority to any carrier then all the most senior people (highest on the payscale) would go to the highest paying carrier, which would cripple that carrier because of the dramatic increase in labor costs.

Instead, how about a flat pay rate that doesnt vary with longevity, but can vary from company to company.

Company A:
737 FO rate: $100/hr
737 CA rate: $150/hr

Company B:
737 FO rate: 90/hr
737 CA rate: 140/hr

If company B wanted to pay less than A, they would need other ways of attracting applicants (maybe better work rules, scheduling, vacation, etc).

I think the problem with our pay isn't just much how much, but also how we get paid. I don't know where the flight-hour rate originated, but the whole concept is absurd. How about pay based on duty time, and the same rates for any aircraft in the fleet (ala UPS)?

Cape Air has pay based only on duty hours and most of the guys I have talked to there love it.

Having only 1 payscale might restrict the company from getting a wider range of a/c. UPS has a relatively similar size a/c in their fleet (757, 767, A300, MD11, 747). Would they be able to pay the same if they started flying smaller jets like a 737 size, or an Ejet?

Maybe just a flat salary similar to how contract carriers overseas do it. You can bid for whatever schedule you want, it will all be the same pay(but changes for different a/c).

Perhaps it's because the 10 year F/O has more years of experience?
I could be wrong on this though :rolleyes:


Ally

Flat pay would help, seniority/longevity transfer would be great, those are all up to us and our unions to achieve. But the RLA is the one thing that our lawmakers can fix. We elect these folks and they do squat to help us. Last time I checked trains just went fast and slow, our aircraft do a bit more than that. With all that this job requires of us (dont forget TAFB) I don't buy into subsidizing the 'greater good of the country' by sleeping in a van and eating rice and beans for dinner while barely keeping my lights on at home.

Your collective bargaining agreement. The union put forth a contract to the membership, the membership (hopefully) read the contract, and the MAJORITY of the membership voted for it. In other words, the majority approved of it and people willfully accept the jobs with stated and agreed upon pay and benefits.

Yes, you are wrong because the 10 years of experience only applies to that particular carrier and his date of hire with that particular carrier. It does NOT look back at experience. If we had some kind of national seniority list, you'd be right.

I know this has been said a million times, but I guess I'll mention it again. You are not paid what you think you are worth, you are paid based on what you can successfully negotiate. And that is true whether you are in a union or a non-union employee negotiating a wage with a potential employer.

I think some of the foreign carriers pay for the seat, and not the plane (my current company does).

But, I'm also on salary, so I can fly zero to 100 hours a month.

And perhaps the 10 year FO has exactly that, and the one year FO was a 15 year captain at his previous airline.

You are correct.

I was addressing the previous poster that said that 10 year FO having more experience warranted higher pay, and that's wrong because it only takes into account time spent at that particular carrier... NOT the true experience.

Lab Rat,

Agreed. No matter how "important" we are, or how many passengers we carry, or how much responsibility we have, we are only going to get paid what we negotiate.

And to do that we need tools. The RLA and union system hinder us from using our best tool.... instant strike. Which is what everyone else (other industries) does when they say, "hey, either pay/treat/love me better or I am out of here."

The RLA puts up road blocks (cooling off periods, etc) to hinder that so that "the greater good" is not hindered. And the Union does it because it says, "sure you can leave your job, but if you try and come over here with your 747,767, MD80, DC-9, DC-10, 737 types and 18,000 hours you will start on the bottom at first year pay and benefits."

So the senior guys are beholden to thier carrier they have been with for 20 years and managment knows it. They know they will never leave because they can't get a better job in the industry anywhere else.

Therefore we lose our power to negotiate and rely on the "rising tide raises all ships/ solidarity" ploy. Which never works, because in the end each pilot will do what he has to do for his own family. And that is human nature and no matter how much propaganda Unions sell, that will never change.

Someone else on this board said it better than me, but Unions speak to mankinds best nature, but not to reality.