Wal-Mart has drawn a lot of attention for its low wages, measly benefits and relentlessly anti-union posture. But Wal-Mart is just a symbol of a larger trend that is dragging down the standard of living for American workers. Just consider the once-prestigious airline industry, where workers who in the past made a very good, middle-class living are now giving back billions of dollars in wages, pensions and health benefits.
It's hard to argue against the idea that one or more of the large, traditional airlines will soon close its doors; there are simply too many seats and not enough passengers to fill them. The liquidating airlines will sell off routes and planes to other ailing competitors or to the low-cost Wal-Marts of the skies like JetBlue, AirTran and ATA, which have transformed the business by brutally cutting costs and running maniacally efficient operations. Thousands of jobs will be lost. The remaining workers will face a grim future of lower pay, no healthcare coverage and lost or vastly reduced pensions.
JetBlue, for example, offers no traditional pension, and workers must pay a large part of any healthcare costs. The traditional, larger airlines are sliding backward toward the JetBlue standard. United used to fully cover its employees' healthcare; now workers have to pay 25% of the cost. JetBlue's machinist wages are only slightly lower than United's, but that's because of the double-digit percentage cut in United's machinists wages. JetBlue's pilot pay is nearly competitive with Delta's, but that's only because Delta's pilots, threatened by the airline's possible bankruptcy, just agreed to a 33% pay cut with no wage increases for five years.
The low-fare airlines also don't shoulder the burden of the "legacy costs" -- the long-term costs for employee pensions and retiree healthcare that the traditional airlines have. We once valued companies that took such responsibility for the people who had invested their sweat and blood to make the company a success. Now these costs are seen as a drag on competitiveness.
How has this happened in what is perhaps the most unionized industry in the country? First, there has been no overall labor plan for an industrywide solution because there are too many unions representing airline industry workers -- a dysfunctional structure symptomatic of the entire labor movement. There are three airline pilots unions, three unions representing flight attendants and seven other unions representing ticket agents, machinists, air traffic controllers and baggage handlers. Each union has separate interests and a separate constituency.
Moreover, unions are too often "company" unions, meaning they are negotiating and managing the rights of workers at a specific airline rather than for the entire industry. When a union agrees to concessions in a bid to save jobs at one airline, inevitably another airline will demand the same of its workers, who are represented by a different union. That leads to an unending cycle of wage cuts aimed at remaining competitive or preserving jobs of airline workers.
What airline workers need is a merger of all the unions into one or two unions. The larger, merged union would encompass the entire industry, allowing labor leaders to set forth one standard for acceptable wages, benefits and work rules, and to better manage the crisis facing airline workers.
The union could also, more effectively, threaten to strike any airline trying to use bankruptcy to cut wages or pensions, as United and US Airways have done and Delta is threatening to do. Even if a strike drove one carrier out of business, such a scenario would be preferable to the never-ending race to the bottom currently underway. Right now, each union usually has to flex its muscle alone, as the flight attendants did this week, threatening to strike United and US Airways if the airlines used the courts to renege on their labor contracts. Unless unions see their goal as establishing and fighting for an industry standard, the workers are doomed to be helpless victims of the airline crisis.
Consumers are eagerly lapping up the low fares in the skies, oblivious to the fact that they are helping undercut the American middle-class dream. In effect, we are putting our short-term pocketbook needs (low fares) ahead of our longer-term interests -- decent-paying jobs and benefits. It would be far wiser to pay more for a service in return for a society that values jobs that support families and rewards work.