Wage Fallacies
10-30-2009, 06:54 AM
#1
Gets Weekends Off
Thread Starter
Joined APC: Aug 2008
Posts: 770
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.
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.
10-30-2009, 07:09 AM
#2
Gets Weekends Off
Joined APC: Apr 2008
Position: 757/767
Posts: 588
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.
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.
10-30-2009, 07:33 AM
#3
Kerbal Rocket Surgeon
Joined APC: Dec 2007
Position: DTW 717A
Posts: 1,099
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.
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.
10-30-2009, 07:59 AM
#4
Gets Weekends Off
Joined APC: Jan 2007
Position: Self employed
Posts: 3,048
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.
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.
10-30-2009, 08:13 AM
#5
Gets Weekends Off
Joined APC: Oct 2008
Position: 1986 LeBaron Convertable
Posts: 439
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 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.
10-30-2009, 08:18 AM
#6
Prime Minister/Moderator
Joined APC: Jan 2006
Position: Engines Turn Or People Swim
Posts: 39,292
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.
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.
10-30-2009, 08:29 AM
#7
SDQ Base Chief
Joined APC: Mar 2006
Position: 320 CA
Posts: 5,588
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.
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.
10-30-2009, 08:47 AM
#8
Gets Weekends Off
Joined APC: Aug 2007
Position: Satan's Camaro
Posts: 397
Originally Posted by RemoveB4flght
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.
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.
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.
10-30-2009, 09:02 AM
#9
Self Employed.
Joined APC: May 2005
Position: Corporate Pilot
Posts: 7,119
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
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
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