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With Airlines Expecting a Tenth Year of Profits, Employees Are Asking For Better Deals

Thanks to the majority of United States airlines coming to the end of yet another profitable year – the tenth in a row – many of their employees are calling for bosses to provide improved remuneration packages.

Over 120,000 unionized employees will start negotiating their labor agreements that could potentially see major American carriers having higher expenses, including American Airlines who are starting to negotiate not only with pilots and flight attendants but maintenance workers too.

Currently airline companies spend the majority of their expenses on their labor costs with 28 percent of the overall $187 billion revenue being spent on labor costs, an increase of 21% in 2008 – mostly due to higher work forces and increased compensation payments.

Sara Nelson, international president of the Association of Flight Attendants – who has around 50,000 cabin crew members from 20 different airlines, including United Airlines and is calling for flight attendants at Delta Airlines to also join the union – commented that “there are simply more funds to get and workers are cognizant they’re turning out more value.”

This is in stark contrast to ten years ago when many airlines were hit with bankruptcies alongside several megamergers leaving three quarters of the market in the control of four carriers.

However profits started to increase and experts have forecast a net income of under 1% for each of the four big airlines, which although does not sound much actually equates to $12.44 billion.

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Kit Darby tracks the pay rate of pilots and notes that “when the airlines are making money, it’s hard to deny the increase in compensation. Everybody tries to get a good contract when times are good. If it’s a short downturn, they hold on to what they got.”

With the news that profits are continuing to increase airports across the country have started to see protests as airline workers demand better schedules and working conditions as well as pay increases.

Executives at American Airlines and Southwest Airlines have attempted to have labor talks with their employees however they have laid the blame with the mechanics’ unions for delaying talks in an attempt to gain leverage, which in turn has caused operational issues that have led to thousands of flights being delayed or even canceled, although the unions have denied this.

In March of this year a resolution between Southwest and their mechanics ended six years of discussions with the new five-year contract including a 20 percent increase in wages as well as $160 million in back pay for employees.

However the airline’s discussions with their flight attendants is still continuing as well as their discussions with their customer service agents, dispatchers, and pilots. Most of the staff is concerned regarding the Boeing 737 Max still being grounded with the unions claiming the issue has caused employees to lose over $100 million in wages.

American Airlines are still in talks with their mechanics’ unions with the airline suing the unions in May due to the travel disruptions they were causing, winning an injunction that means they can no longer get involved in the airlines’ operations.

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Josh Freed, the spokesman for American Airlines, said “since August, teams for the company and the union have met for multiple days nearly every week” confirming that both groups have “made considerable progress” although further talks have already been scheduled for January.

Another issue is the fact that although unionized airline workers’ contracts are allowed to have the dates amended they do not expire, all contracts are valid beyond the finalized date and any negotiated raises will no longer be applied.

It is worth noting that employees are not only looking for extra wages with American airlines mechanics asking for the outsourcing of jobs to be limited, especially those to foreign companies. American Airlines pilots are also requesting improved scheduling to ensure a “better quality of life.”

Eric Ferguson, Allied Pilots Association President as well as an Airbus A320 captain agrees that “scheduling is our no. 1 issue.” The union has also requested that employees on the less-desirable flights receive higher wages as well as providing easier ways for the routes to be available to pilots. This should encourage the trips to be picked up by pilots, reducing the operational problems, which in turn would enable revenue and profits to increase and therefore be shared with the airline’s employees. However Ferguson wants to make it clear that the unions are not just saying “pay us more,” but that they want the airlines to “fix the problems” they already have.

The APA represents around 15,000 pilots and although talks started in the first half of 2019, the contract would not be amendable until the beginning of 2020. However the union are asking for 16% raises over a three-year deal. The airline has countered with the same increase but over five years.

Doug Parker, CEO of American Airlines, spoke at a meeting in June last year telling their pilots “shame on us if we can’t figure out over the course of a year how to get a contract done before the amendable date.”

Classroom

Teacher Walkouts Continue Amid Education Crisis

It’s been nearly two weeks since about 300,000 Chicago students have been to class. Even if they showed up, their 25,000 teachers wouldn’t be there. They’ve been on strike since 17 October, demanding pay raises, resource improvements, school staffing increases and even solutions to the city’s pricey housing.

Weeks of negotiations between the Chicago Teachers Union and the city’s school system – the third-largest in the US – have been unsuccessful. But Chicago is just the latest in a wave of teachers’ strikes that has swept through many US cities.

Last year saw the most US workers on strike in a generation. According to the Bureau of Labor Statistics, there were 20 major work stoppages in 2018, involving 485,000 workers – the most since 1986. In a big shift, the most-represented industry was teaching.

Significant state-wide work stoppages in education occurred in West Virginia, Arizona, Oklahoma, Kentucky, Colorado and North Carolina. In January 2019, teachers in Los Angeles – the nation’s second-largest school district – went on strike for six days. Smaller strikes have taken place nationwide as well.

The strikes are about better working conditions for school staff and better learning conditions for students, according to Eric Blanc, a sociologist at New York University and author of Red State Revolt, a book about the teachers’ strike wave.

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Specific demands may differ, but across the country teachers claim to face many of the same challenges – large class sizes, teacher shortages, low pay and a lack of proper resources. In Chicago, teachers are calling for things like raising teacher salaries, reducing class sizes and adjusting school schedules to add morning preparation time for teachers.

Strikes in other states involved similar issues, with some pointing towards a lack of funding as the root of the problem. During the financial crisis of 2008, most states cut school funding, according to the Center on Budget and Policy Priorities. And while school funding has gradually improved since 2015, most states have not yet recovered to pre-recession levels.

Dr Ileen Devault, labour historian at Cornell University, said the problems started earlier than that, pointing to decades of US tax policy. “All of the efforts in the US to cut back on taxes – which means cutbacks on public funding – has meant that schools have gotten less and less funded,” she said, adding teachers have finally reached a breaking point.

Dr Devault also said the strikes are about a lot more than salaries, with teachers demanding a variety of changes needed for schools to run effectively.

In early 2018, 35,000 teachers in West Virginia went on strike state-wide for almost two weeks, resulting in a 5% pay raise. Shortly after, 20,000 teachers across the state of Arizona won a 20% salary raise by 2020 after a five-day strike. And in early 2019, 30,000 teachers in Los Angeles went on strike for six days, resulting in a 6% salary raise, smaller class sizes and an increase in support staff.

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There have been significant wins in other cities as well. Dr Devault called the strikes “amazingly successful”. She believes the reason for this is that teachers have communicated to the public that they’re not just looking out for their own salaries, but for everyone, including students and support staff like bus drivers and nurses.

The spike in strikes might also be a contributing factor to their success. It’s given legitimacy and added power to teachers, allowing for them to make more transformative demands. “There’s a national teachers’ movement now,” Mr Blanc said. “Strikes as a whole are more successful because they’re feeding off one another.”

The wave may have been sparked in the same city that it’s playing out in now. The Chicago teachers’ strike back in 2012 sowed the seeds of protest for teachers across the US, according to Mr Blanc. “Organizers in West Virginia, Arizona, Oklahoma, very consciously looked at that 2012 strike,” he said. “They studied the experience of Chicago.”

The strike in 2012 – which included pay raises and blocking a programme that would’ve placed increased emphasis on student test scores – was successful, but much less ambitious than what’s being demanded now.

As a comparison, while the recent wave of US strikes has not been matched in the UK, teachers in both countries share many of the same concerns, including pay, class sizes and school staffing.

Earlier this year, the Department for Education announced a 2.75% increase in teachers’ pay. Dr Mary Bousted, joint general secretary of the National Education Union – one of the UK’s biggest teaching unions – called the salary increase “fundamentally necessary” to encourage young graduates to pursue teaching and address the teacher shortage facing the country.

Another concern weighing heavily on UK teachers is the workload. A 2018 survey by the National Education Union found that 80% of teachers are considering leaving the profession due to the heavy workload, including long hours.

Strike

50,000 Union Members Go on Strike at GM

This morning, September 16, nearly 50,000 employees of General Motors went on strike at factories across the country, standing in picket lines and holding signs, according to a report from the New York Times. The strike was authorized by regional leaders of the United Automobile Workers union and was the union’s first walkout since 2007. The demands of the union for their employer echo many of the complaints expressed by working people in modern-day America: strikers want higher pay, idle plants to reopen, and jobs to be created. GM, on the other hand, wants to lower the amount of money they pay for their employees’ health care and increase employee productivity. This is the largest strike of any union on any business since 2007, which is the last time the UAW went on strike.

The UAW has the support of the Teamsters union, which is comprised of truckers, many of whom are responsible for transporting vehicles from GM’s plants to dealerships. The Teamsters union, standing in solidarity with the UAW, will not cross UAW picket lines, effectively joining them in their strike by refusing to work at GM plants where strikes are ongoing. While the UAW and GM negotiate an end to the strike, GM’s stock prices have fallen precipitously, as investors worry about the company’s financial future. While GM has enough cash, borrowing power, and inventory to sell to keep the company financially afloat for a few weeks, a strike lasting beyond that period of time could have long-lasting devastating consequences, reducing the company to junk bond status.

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Strikers complain that while GM has seen increases in profit over the past several years, their wages have not gone up in response. Although the UAW includes members from Ford and Chrysler, only GM employees went on strike because GM is the only auto manufacturer that is closing American plants. Though GM is the primary target of the UAW, the union is negotiating for terms that would benefit workers across the industry. The strike was triggered by the expiration of labor contracts over the weekend; as Ford and Chrysler were not the target of the strike, their contracts were temporarily extended. Though it’s bad for business, auto manufacturers prefer to be the first target of strikes rather than the second or third targets, as they can work to meet bargaining objectives more directly with greater flexibility, according to CNN.

The union feels particularly aggrieved because it claims that it helped save GM during the Great Recession.

Though they will not receive regular pay from GM while they are striking, workers will receive $250 per week from the union’s emergency strike fund. For these employees, the potential for higher wages upon the strike’s conclusion makes the temporary loss of income worth going on strike. One of the union’s major complaints is GM’s reliance on temporary workers, who receive fewer benefits and often don’t have a clear path to permanent employment. Additionally, the union wants a better profit sharing plan from GM and lump sum payments in addition to higher hourly wages. The union argues that while these concessions may hurt GM’s bottom line in the short term, paying employees higher wages would boost the economy overall and lead to higher productivity and quality of work.

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The union feels particularly aggrieved because it claims that it helped save GM during the Great Recession. After economic problems led sales to plunge, GM and Chrysler went into bankruptcy, being kept alive by federal bailout money. During this time, the union agreed to several concessions for GM, including reduced pay and fewer benefits for new hires, in an effort to keep the business afloat. Analysts, however, claimed that this move on behalf of the unions was made out of necessity, as bankruptcy judges have the power to break union contracts, giving employers in bankruptcy more leverage.

Democratic candidates for president have weighed in on the strike, generally offering support for the workers and unions generally. Joe Biden’s campaign tweeted that he stands with UAW, adding that jobs are about dignity and respect in addition to a paycheck. Pete Buttigieg, Bernie Sanders, and Elizabeth Warren have also expressed their support of the strike via Twitter. The strike also comes amidst legal problems for many of the union’s leaders, who have been accused of appropriating union funds for extravagant personal purchases, including a Ferrari, and may serve to draw attention away from this controversy.