The Great Accountant Shortage
 

Joe’s Accounting has been around for awhile. It is an established respected business owned by Joe who has 10 accountants working for him. Joe’s Accounting is a profitable business and Joe does pretty well for himself. One day Joe gets a great idea. Right now his accountants make $16/hr. He decides to lay off 5 of his accountants. The remaining 5 will work on his large client’s accounts while he will bring in 5 accountants from Temp Agency #1 who only make $12/hr to work on his small accounts. This works out well for Joe as he is able to make a little more money now that he is paying less for some of his accountants.

One day Temp Agency #2 stops by the office and tells Joe that they can do the work for less then Temp Agency #1 because they only pay their accountants $11/hr. Joe says great that will save me even more money and he promptly hires Temp Agency #2 to replace Temp Agency #1’s accountants. Temp Agency #1 tells its accountants hey in order to compete with #2 we can now only pay you $10/hr. Not wanting to lose their jobs Temp Agency #1’s accountants agree to the pay cut. Joe rehires Temp Agency #1’s accountants and he makes even more money.

Temp Agency #2 says now we have to be even more competitive. We can legally hire a few new graduates without their accounting license and pay them even less. Temp Agency #2 lays off 3 of its accountants and replaces them with new graduates working to get their accounting license. They pay these new graduates $8/hr until they obtain their accounting license. They also bring the pay of the remaining accountants down to $10/hr. Joe thinks this is great and he rehires Temp Agency #2. He also tells his remaining accountants that they will have to work for $13/hr now or he will bring in more accountants from Temp Agency #2.

One of Joe’s accountants decide that he is not will to work for $13/hr and he quits to find work elsewhere. Joe asks one of Temp Agency #2’s accountants to work for him at $13/hr. This is an improvement over the $10/hr that the accountant is now making so the accountant jumps at the opportunity. This causes Temp Agency #2 to hire another new graduate to take his place.

At the same time the government decides that it is seeing too many mistakes coming form recent graduates without an accounting license. The government mandates that everyone working as an accountant must have an accounting license. Two more of Joe’s accountants decide to retire and Joe hires 2 of Temp Agency #2’s accountants who have recently received their accounting licenses. Temp Agency #2 must now replace these accountants. They put a help wanted add out looking for a licensed accountant with a starting pay of $8/hr. There are lots of unemployed accountants in the area from the string of layoffs that had happened over the last few years as Joe and the Temp Agencies looked for cheaper labor, but non of them are willing to work for $8/hr. Now Joe and the Temp Agencies are faced with an accountant shortage.

What's the point of this post?

With all of the articles being written on the “pilot shortage,” I thought this story was a very simplified version (easy to understand) of what has happened in the airline industry. No need to read it if you don’t want to.

Well this is useless. Stop posting crap, we know this.

News articles are written at the 8th grade level. I don't think anyone needs to have it dumbed down except for 7th graders and you.

There is lots of growth and demand for airline travel. I don't think you can leave those facts out when talking about the pilot shortage. Also, the supply of atp pilots out there in my opinion isn't enough to staff the regionals going forward.

The pilot shortage is only at the regional level, but even raising entry level pay I don't think can cure it quickly. The loans aren't there to fund people's training, even paying 50k for first officers wont make loans available and it takes years to get to 1500 with atp mins.

I don't know how the airlines will solve the shortage but I think it will involve shrinking regionals and reduced seats available.

. . . and every member of the general public who believes we currently are experiencing a "pilot shortage". Kills me that people voluntarily read a post on a internet discussion board then complain about how it wasted their time. Keep perspective. On a scale of the dumb stuff I read on here everyday, this OP is probably not even in the bottom half.

Exactly. People harass someone because they made changed it from pilots to accountants in a simplified version. Do not forget this is a public forum. Not everyone here is a current airline pilot. To all of those Future students or People debating career change this might help them understand what is happening. They have to dig through a lot of BS from both sides. Managements and schools selling the career and why we have a shortage at the regional level and then what the union is selling. Those not in the industry or looking to get into it have to decide what they believe. And a lot of the time they side with the schools/management. Talk to your family and friends that do not talk about airlines and see what they think the problem is. So far most I talk to think it is the government over reaching and over reacting with regulations with no concerns on what it will do to air travel.

And I'm going to voluntarily continue to post. This thread is silly. If he wants people to understand, then he needs to write an OpEd to the New York Times. You don't need to simply the problem for people who are living through it.

I realize that the majority of people who frequent this forum already understand what is going on. I posted this simple as a comparison story with a satirical overtone which I thought some people may enjoy. I apologize for forcing it upon you and offending your superior intellect.

Apology accepted.

I nominate CBreezy for a trip to BanLand, he's waaaaaay too sensitive to be allowed posting here :D

I'd actually like to second that.

Don't feel bad, he's part of a group that voted in concessions when every other group is saying NO to management's concession crap while the airlines are making record profits(and the management keeps getting huge increases in pay and benefits)!

What's the point of YOUR post? Why don't you go spend some of that frustration on the guys trying desperately to lower the bar for us....

The issue is the shortage of accountants is REAL.

Sarbanes/Oxley and, to a lesser degree, Dodd/Frank have really increased the demand for CPAs.

A few years ago I looked into getting certified myself; if you already have a four year degree the academic requirements aren't too onerous to sit for the exam. For an entrepreneurial type it could be steady supplemental income, a backup career, or even take one out of aviation altogether if successful enough.

You could also change the title from "accountant" to "geologist" - oil and gas companies are experiencing massive retirements of their 60+ year old career geologists and there really aren't enough younger folks coming out of school to support increased analysis and exploration around the globe.

Allegory is a very effective medium to communicate
It allows those immersed in a their own situation to evaluate objectively from another point of view thus serving a valuable purpose
Kudos

The first quote is generally true. I'll add some clarification to the second based on my experience.

There are plenty of entry-level CPA candidates coming into the field, and the supply of junior associates seems to be quite plentiful. However, the industry experiences high turnover among the ranks of those with less than 5 years of experience. Thus, the "shortage" is more so among the senior folks with certain industry or tax specializations.

So, a good "backup" career? I think so, as long as you plan to stay in for a while. But as far a supplemental income is concerned, it is difficult (perhaps impossible) to get lucrative consulting or tax work unless you have a certain amount of training and experience, usually obtained from work with a larger firm. Successful part-time newbies in the accounting trade are likely to offer bookkeeping and/or tax preparing services - neither of which require a CPA license. Building a practice from these two offerings can be quite viable, and ambitious practitioners can certainly replace their aviation income over time.

Just my buck-oh-five.

There is no comparison between accountants and pilots. For one, accountants don't work under a seniority system. They have freedom of lateral movement. They are not forced to accept huge wage cuts because they can simply go elsewhere and get paid the same if not better.

They also do not have "shiny adding machine syndrome" nor do they trip over themselves working long hours for low wages solely because the job is "too cool".

This exists in aviation too - its called "business aviation".