Congress Calls On American To Pay Some Of Their Employees More

Filed Under: American

American’s CEO, Doug Parker, has bragged about how the airline will never lose money again, and has essentially argued that the company’s current profits are at the bottom end of what the airline will ever make. Of course this is music to the unions’ years. The airline has given employees proactive pay raises and bonuses, though employees are trying to bargain for more.

For example, American pilots are angry that Delta employees recently got big profit sharing checks, which are part of their contract and based on Delta’s superior financial performance. It’s ironic, because during American’s last round of contract negotiations, pilots negotiated higher base pay and lower profit sharing, but now they still want more profit sharing.

While mainline employees at American are doing quite well for themselves, one of the dirty little secrets of the US airlines is their regional carriers. The reason they use subsidiaries to operate their regional flights is so that they can operate a lower cost operation, and a large part of that is paying employees significantly lower wages.

Some work groups at American’s regional subsidiaries are entering into collective bargaining agreements for the first time, and they’ve called on congress to demand higher pay on their behalf. Over 80 members of congress signed a letter addressed to Doug Parker, requesting higher pay for employees of Envoy and Piedmont, which are American subsidiaries. This letter reads in part as follows:

As a leader in the aviation industry, you have recognized the importance to the flying public of these employees. They are on the frontlines for American Airlines serving the public in airports big and small, staying late when there are weather-related or other disruptions to make sure passengers reach their destination and performing important pre-flight security and safety checks to ensure that your passengers can travel safely. In some cases, they check in passengers, load their bags and help aircraft depart. They truly help keep the airline running in many challenging situations.

We were surprised to learn that many of these agents earn less than $11 an hour and, as a result, must deal with constant churn at work and struggle at home to make ends meet. In September, you pointed out that the industry has become more reliably profitable and that, in fact, the company would never lose money again. In light of those strong assurances, we believe that passenger service employees who have played a major role in achieving continued company profitability share in its benefits.

We hope that you will conclude your collective bargaining negotiations and ensure that all of your employees can earn a living wage. There is no stronger investment that American Airlines can make for its future, the future of the traveling public and the future of our communities. We thank you for giving our request your full, fair and prompt consideration.

The Dallas Morning News ran a story a couple of days ago about how little many of these workers are earning, including a passenger service agent who earns $15.71 an hour after being with the company for 18 years, and she’s on the very high end of their pay scale:

After 18 years with Envoy, Gower makes $15.71 an hour, half what someone with similar duties makes at American’s mainline operation, according to the Communications Workers of America, which represents Gower and 3,800 other Envoy agents.

Gower’s pay still tops that of many of her co-workers, 75 percent of whom earn less than $13 an hour, according to an online survey of 900 members published by the union Wednesday. In addition to manning airport gates, passenger service agents work on the ramp, helping guide planes on the tarmac and handling bags.

Starting pay for these employees, about 500 of whom work at DFW, is as low as $9.48 an hour, with a guaranteed $1 increase after the first year but no other guaranteed raises for the next 10 years.

I’ll be curious to see what comes of these contract negotiations, and am certainly hopeful that they’ll get some raises. Airlines have historically used these regional airlines to pay a subset of their workgroup less, and that’s one of the reasons we’ve seen regional airlines spread so much. If employees working for regional airlines were consistently paid fair wages, chances are that we wouldn’t see so many regional jets flying.

  1. So true. Pilots at mainline are paid very well, while their counterparts at regional are paid a small fraction while being no less responsible for passenger safety. The pay of these and other regional employees is a travesty. Let us never forget the crash of the CO flight to Buffalo in 2009 that was due primarily to flight crew fatigue and required Congress to step in to regulate work hours for regional subsidiaries. All of these regional pilots and their support staff, down to the ramper on their first day, deserve to be paid a LIVING wage for making sure that all of us pax make it to our destinations safely every day, day in and day out.

  2. Ben, Congress didn’t do anything. Members of Congress wrote a letter. Those are two very different things. You should change the title of this article.

  3. There is, economically speaking, truth to Jason’s comment. It’s the same argument essentially about Walmart’s pay. No one forces people to work at Walmart for their stupidly low wages (or what used to be low wages…not sure if they’re paying more these days); they do it voluntarily as we have free labor markets in America. Don’t like the wage, then get some training or education and get a better paying job. It’s incredibly simple. Not easy, but simple.

  4. Don’t forget that most of these outsourcing companies do everything in their power to avoid paying benefits. They will hire employees at 32 hours to avoid having to pay for health insurance, and many will end up having to work for multiple outsource companies at the same airport (Envoy, Delta Global Services, Worldwide Flight Services, Menzies, etc.) to make ends meet.

    The result is that many of these people are in the working poor, working more than full-time to try and make ends meet, yet still qualifying for government assistance. Instead of the employer paying for health insurance like they are traditionally expected to, they outsource the job to a company that does everything in their power to circumvent that, and they eventually end up on the government rolls, Medicaid, etc. In the end, we all end up paying more for their cheap tactics – the Walmart effect.

    I am utterly surprised that there hasn’t been a terrorist incident from an individual working for these outsource companies. The requirements to obtain a job are low, they get access to the ramp without having to go through security, they are stressed, substance abuse is high. That makes an easy formula for someone to become an extremist, be blackmailed, or commit a crime for hire.

  5. I’ve always been amused that the airlines complain about pilot shortages at the regionals, yet have done little to improve the most obvious way to ensure quality workers.

  6. @ MD

    “Instead of the employer paying for health insurance like they are traditionally expected to, [workers] eventually end up on the government rolls, Medicaid, etc. In the end, we all end up paying more …”

    Corporations may be legal personalities, but they are utterly sociopathic. Pretty much every one of them is also a subsidy junky – paying such low wages that government benefits are needed to underpin a basic standard of living for at least some of their staff.

    Companies that rely on governments to subsidise their workforces are not in any meaningful sense “profitable”. They are just siphoning off public cash to cover up their miserable policies.

    It’s yet another example of the US3 taking sneaky public subsidies for themselves, then whining that the ME3 are playing dirty.

  7. @the nice Paul

    That’s republican policies for you. They are “sociopathic hypocritical manipulative sickos” or “dumb tribal retards”.

    Which is Donald Trump? Which is the average republican on this board?

  8. @Jay, Walmart employs thousands upon thousands of workers. Where do you imagine they’re all going to go to find these magical better paying jobs? Do you think it’s possible for every single walmart worker to get an education/skills/whatever you believe they need to get a higher paying job? If so, then who is going to check you out at the grocery store, serve you at a restaurant, or handle your bags at the airport? If not, why don’t you believe that the people providing you the services you use deserve a living wage?

  9. It’s not the role of governments to dictate to private companies how much they pay their pilots. As has been correctly pointed out, if you don’t like your pay and conditions, you need to take responsibility for yourself and find a job that has pay and benefits that you’re happy with. Once the airline sees they’re haemorrrhaging pilots (or other staff) it won’t take long for them to take action. This exact same thing happened this year with Ryanair pilots leaving to join Norwegian; it’s basic economics at work.

  10. @Anastasia

    Your point is fair, but the idea is as you improve yourself and gain skills you move up by taking a job vacated by someone else who has just got a promotion above you. Your job is then filled by someone with no experience right at the bottom. Just Google the Corporate Ladder

  11. Jay – Conveniently ignoring the fact that there aren’t enough skilled jobs for the unskilled to all move to en-masse…

    I’ve always believed companies reaching a certain level of profitability should be forced to pay a living wage as opposed to the minimum wage. A perfect balance of capitalism and socialism in my mind and makes the “but small companies can’t afford it” argument redundant.

  12. FMLAX:

    Can you please tell me what a “LIVING” wage is? I’m always amused when people us that term, but never get specific about it. Is it $15 per hour? $20 per hour? $10 per hour. And what does a “LIVING” wage need to cover? Cable TV versus OTA? Cell phone? Your own car versus public transportation versus a bicycle? Eating at restaurants? Rent a house or a rent a room? Supporting 3 children without a spouse?

    Looking forward to your answer …..

  13. @Debit
    Thanks for the stupid name calling …shows your ignorance.
    Obviously you’ve never had to hire or pay someone to do a job. I see all kinds of tears about someone working the same job for 20 years and not got a raise.
    Every job has a value, just because you have flipped a hamburger for 20 years doesn’t mean in the real world you should command a higher salary. Every Job has a salary range based on the free market.
    Econ 101

  14. The real problem is u have guys like Doug Parker who believes HE actually flies planes, handles bags, cleans planes, a thru and thru republican ,who thinks only he,and corporate idiots like him deserve big money.

  15. @Nice Paul… Right on the money.
    @Lucky, thank you again for a really relevant piece.
    And for those with “Trump Derangement Disorder,” from a rabid Independent, these policies flourish no matter who is in the White House or controls Congress, because both parties are beholden to special interests despite the hypocritical grandstanding, and quasi religious devotion to political parties voters share.

  16. I agree that gate agents are underpaid. Pilots, not really. Regionals are juts a stepping stone into majors. One has to get the jet hours and experience before moving to big $$ major airlines. Same goes for doctors, attorneys and a lot of other professionals. On per hour bases pilots at majors earn a very good living and life will get even better in the near future as airtravel in Asia is booming. Plenty of $250K tax free jobs for mid career captains.

  17. Preston Vorlicek – That would be because a living wage is different in every city… Do you really need it to be explained that the cost of living in New York City is more than a random town in Uganda?

    There also isn’t a specific definition of what the living wage includes. It’s generally calculated along the lines of the amount of money needed for a “modest yet basic” life for a full-time worker.

    Why you couldn’t just Google that yourself I have no idea – other than you seeming to have a prejudice against poor people getting more money of course.

  18. Callum: that’s why I asked specifically what a living wage includes. Does it include cable tv, cell phone, car, restaurants, private house, supporting 3 children with no spouse, large screen tv, new clothes, etc.

    What exactly is included in “modest yet basic”? Your right, there is no specific definition … that’s why I asked for people to put forth their opinion about why people should be entitled to in earning a “living wage”.

    We’ll see if you care to answer or just continue to insult me.

  19. As I’ve already said, and you’ve already acknowledged you know, there isn’t a specific definition so whether cable tv, cell phone, restaurants etc. are included depends on the definition you’re using… They’d generally include housing costs, utilities, transport, food, clothes and taxes/rates.

    Did you? I don’t see you asking for why people should be entitled to a living wage – just making seemingly pointless observations on how there’s not a single global definition for the phrase. Though as a living wage is designed to allow people to live a comfortable life, I think the reasons are pretty self explanatory. I personally would like everyone to live a comfortable life because I care about the welfare of human beings. Do you not?

  20. Callum: as expected, still no answer……

    I just don’t understand why people who use the term “living wage” are afraid to define it.

    Would you care to let me know what specifically you would include in a “comfortable life”?

  21. @Preston Vorlicek Did you miss this sentence in Callum’s last response?

    “They’d generally include housing costs, utilities, transport, food, clothes and taxes/rates.”

    Seems like he answered your question with specifics, so I’m not sure what else you want or expect.

  22. Preston Vorlicek – As J Dee said, I did answer with specifics. Amusing that you’re the one whinging about not being answered yet you’re the one who isn’t answering the questions.

    If you expect me to produce a policy document for EXACTLY how I want to calculate the living wage then you’re being ridiculous. While the definition is flexible, it’s not so flexible that they’ll come up with wildly different sums. Whether the amount turns out to be $15, $16 or $17 per hour isn’t particularly important in a comment on a travel blog.

  23. @ Preston:
    It is precisely this disingenuous line of questioning that has American society as combattative as it has become. Common sense, which is clearly lacking here, would tell you that in any family where one or both salary earning adults earn US$10 an hour, it would be near impossible to raise a family which would not effectively live in poverty.

    Instead of caring about those people and considering / suggesting that if an airline is offering salary raises to the majority of staff in one unit that staff in other units should receive similar base pay increases for similar jobs performed, you debate how “a living wage can be calculated”!!!!

    But no, to try to prove how smart you are (and for which all the semantics in the world will never prove what doesn’t exist), you should perhaps provide valid reasons why you believe “Apple for Apple salary + conditions for jobs performed” is not appropriate in the above mentioned case.

    As an Australian, I can only say that when I read comments like yours, it is telling of the society that neither provides health care for all nor safe learning environments for children while st the same time, everybody demands rights for themselves at the detriment of everyone else.

    A cohesive society will only develop when the word “WE” replaces the word “I”. Enjoy your next flight on an airline served by staff you believe are not worthy of the same salary as your connecting, mainline flight. I’m sure your experience will not be commensurate with the salaries paid!

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