Thursday, July 19, 2007

Bye Bye Middle Class Jobs

Nice outfits! But ladies, you are WAY too expensive! We had to get rid of you and your whole damn airline too.

Why? Because you made such a huge amount of money serving our forefathers. If you worked for Southwest Airlines today, you would be making "from $23 to $58 an hour." Holy cow! 58 x 40 hours a week x 52 weeks = almost $121,000 a year. I'd like to make that much. America just can't afford pushy, uncompetitive, overpaid workers like you. So goodbye, ladies!

Ha! Though journalists like the one that said "$23-$58 and hour" are too dumb or lazy to figure it out, those "labor costs" that come from management always include health care, retirement, and any other benefits. That makes sense for management, since they need a figure for their total costs. But it has nothing to do with what their employees are actually living on.

I flew the increasingly pitiful airline United recently. As a result of a truly incompetent set of ground team reactions, much of this particular flight was heading from San Francisco to Washington DC with official assurances that we would all miss our planes to Europe, could not rebook on United, would not be rebooked by United on any other airline, would not have our hotel funded by United, and would be staying in Washington for an unknown amount of time at our own expense. As a result of all this, I got to talking to a young flight attendant, who told me, for example, that first-year salary for an international flight attendant at United is $1600 a month, gross. It goes up to $2400 / month in the second year. To work for United, he had to move back in with his parents.

Median salaries for flight attendants vary from $30,000 to $50,000, and I doubt the maximum goes much beyond $60,000. (Some union info is here.) And flight attendants have been forced at various airlines to give back both wages and benefits. Same for pilots (over 11% pay givebacks for pilots recently at United).

Now Southwest Airlines, arguably the most successful in the business, is offering buyouts to most employees with more than ten years of service. 2000 of 9000 flight attendants would be eligible. They'll get $25,000 and some continued benefits to "retire."

This is an amazing fact about US business. The top company in a vital industrial sector thinks it cannot afford its workers with more than ten years of service It can't afford workers that in some cases will be 30 years old. It's not evil management operating on its own, but a whole system of rules, starting with the need to maintain short-term stock price and to compete with the fastest risers that means Southwest would love to have a workforce consisting entirely of 20-year-olds at the rock-bottom end of the scale. gaahh! Now at 30 the parents can start to move back in with the children they were hopefully smart enough to have when they were 12. Or live by charging their children rent - until the children turn 29 and "retire."

Yesterday brought the same kind of news about sanitation and grocery workers in New York and California. A 17% raise for trash collectors! Except that it's over nearly five years, and is thus about 4% a year, which hopefully will stay about 1.5% more than government-calculated rates of inflation. Spoiled, spoiled workers! The top salary will become something over $67,000 - in 2011. It's $57,000 or so now. These are "middle-class jobs," but they are embattled, and are noticeably connected to union militancy and the public sector - two things right-wing leaders hate.

There may be a union contract for grocery workers in LA. The LA Times story included the following information:
Currently, veteran workers' wages top out at $12.17 to $17.90 an hour. The exact pay depends on job classification, such as general merchandise clerk, food clerk and meat cutter, and how often the employee works Sundays and other shifts with premium pay.

Second-tier employees currently start at $7.55 to $11.05 an hour, depending on the job classification. Their wages top out at about $1 to $3 less per hour than those of the veteran workers.
Let's say these are actual wages. So if you are an old-line worker, and you don't work all possible overtime, and aren't right at the top, let's say you make $15.00 for a 40 hour week. How much is that for a year? $31,200 gross.

If you are a second class worker, i.e. newer (and probably younger), let's say your average is more like $10.00. That's $20,800 a year. In Los Angeles.

LA Times columnist Steve Lopez had a good column last month about the reality of these kinds of wages. So we have another vital industry sector that can't pay living wages? Where you have to move back with your parents to take the job, or live with your kid in a studio apartment if you don't?

Ben Stein's shredding of United Airlines management was probably his best New York Times column ever. I've quoted him before on levels of income inequality in the US so extreme that they should make our first reaction to incessant management complaints about unaffordable workers be to laugh out loud. Let me remind you. Here's Ben:
In 2004, the top 130,500 taxpayers — roughly the wealthiest 0.1 percent of earners in this great nation, with added family members that brought their numbers to 300,000 — had more income than the 120 million Americans at the bottom. Put another way, that sliver of the population at the top of the heap was paid, as a group, more than the bottom 40 percent of all Americans combined.
Think about those numbers, rounded to 120 thousand vs. the 120 million. Each member in the first group makes in one year what each member of the much larger second group makes in a thousand years. Or in 2007, the first group has earned since New Years' the same that the second group member would have made since the Normans invaded England in 1066.

OK, no class war here. It's just market efficiency saying we can't afford meat cutters and flight attendants making $60,000 per year, or even $30,000. The top 130,000 can't afford it. Goodbye, ladies!

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