Future of organized labor in the US commercial aviation industry - Essay Example

The introduction describes the strides taken in the aviation industry over the past ten years so as to place the topic in context. Thereafter, some positive prospects for the future of aviation are examined and these include reduction of corruption and protection of employees during strikes. However, the future may not be very positive owing to increased foreign ownership of US planes, outsourcing of US jobs, increased need to negotiate wage cuts by major carriers, a move towards non-unionized employees in low cost carriers, poor union membership in other industries and fewer cases of collective bargaining in the aviation sector. Introduction The US commercial aviation industry has undergone drastic changes over the past few years. At first, the industry recorded high returns from the mid nineties to the year two thousand and labor issues were addressed substantially at that time. The latter year was when the US aviation industry peaked because afterwards, the September eleventh attacks undermined consumer confidence in commercial aviation and numerous losses were recorded. Nonetheless, the industry is picking up and today, some sections of the industry have gained back their momentum. There are two major categories of carriers within the US commercial aviation industry; these are network carriers and low cost carriers. The latter category has recorded positive performances especially from the year 2004; however, their counterparts have not. The reason behind this is that the six network carriers have adopted poor business models. (Yates, 2004) When the major network carriers perform poorly, then they tend to look for ways of minimizing this poor performance and one of the areas targeted is organized labor. Numerous aviation companies have been cutting their labor costs and this may be disastrous for aviation employees. Against the background of these labor cuts, the future of organized labor may be marred with many challenges as explained in the essay. The future of organized labor in the industry Network carriers are facing stiff competition from their counterparts in the low-cost carrier segment. Consequently, in the future, network carriers might decide to look for ways of making their businesses models more profitable. One method which they could utilize is by expanding their flight ownership and operations to regional carriers. This is already taking place but all is not well for organized labor. In 2002, major network carriers entered into an agreement with pilots' labor unions to disregard Labor Scope restrictions. In order to protect the working conditions of pilots, it was necessary for the unions to restrict plane ownership among regional carriers. However, following negotiations with these regional carriers, the unions granted the former party their wishes. The overall result of this measure is that pilots are now exposed to exploitation by their employers. This illustrates a step backwards in organized labor and may continue in the future. (Gall and Zieger, 2002) Good performance in the commercial aviation industry may not necessarily be reflected in organized labor. Given the fact that major network carriers are trying to reduce their productivity costs by minimizing labor then it is likely that organized labor may not fare very well in the future. As we speak, network carriers still operate at higher costs (in terms of labor) than their low-cost carrier counterparts but this may change in the future. Low cost carriers have been cutting down costs by employing workers who were not unionized or low wage employees. Additionally, numerous workers are required to perform multiple tasks. All these poor working conditions can be resisted through organized labor but low cost carriers are doing away with them. In order to remain competitive, major network carriers may opt to follow suit and this implies that airline industry workers will have to work under worse conditions in the future. The airline industry in the future is likely to witness greater loan guarantees from the government of the day. (Bigsky, 2004) This will go a long way in protecting airline workers. The reason behind such a prediction is that signs of this occurrence have been hinted at in the recent past. During the US's 2004 presidential elections, a group known as Airline Pilots Association (the Association has over forty two different companies and is also the largest Airline association in the country) complained that the previous President-George W. Bush had not demonstrated strong commitment towards the plights of workers within the airline sector. Consequently, the association pledged its support for another presidential candidate because he demonstrated the commitment which they were looking for. It agreed to support this presidential candidate if he would institute the changes that he laid out in a letter to them. In that letter, he asserted that airlines needed more funding especially with regard to the September eleventh attacks. Despite the fact that the candidate they endorsed did not win the election, those principles are still desirable today. Since the US is currently undergoing a political transition, then it is likely that organized labor may witness some positive changes for the betterment of the aviation worker. (Bigsky, 2004) In the future, it is also likely that organized labor employees will solicit greater protection from the law especially with regard to corruption. It has been show that some airline carriers engage in corrupt deals from time to time. However, it is difficult for airline workers to report this if they are not guaranteed protection after doing so. Consequently, most of them end up hiding the truth. However, with increasing concern for transparency within the aviation industry, then worker's unions may fight for whistle blower's rights and this may cause the government to pass laws that protect them. Currently, US employers have exclusive rights to deal with employees especially during strikes. Airline owners can choose to fire employees on strike and replace them with permanent workers. This issue has caused a lot of ripples among airline unions and could propel them to take sterner action in the future. Many unions within the aviation sector take the issue of industrial action very seriously because of incidences that have occurred in the past. Taking the example of what had happened during the eighties when President Reagan was in power. At that time, members of the Patco Union went on strike and instead of the president protecting their rights; he chose to support their employers who had threatened them. These employers wanted the striking workers to go back to work immediately or they would replace them permanently with other workers. The overall result of the move was that a substantial number of workers lost their jobs and those who replaced them never benefited from wage increments. All the workers who were affected by those actions were organized or unionized. The US has come a long way from such drastic actions by employers. However, there is still much that has to be done; employers today still have the power to fire employees who take part in strikes. Since this issue has generated a lot of interest from various unions, political parties and other organized labor stakeholders, then chances are that something will be done to change that occurrence. There is some possibility for positive change in this sector. Forces of globalization have permeated many sectors of the US economy and the airline industry is no exception. US airline laws have been relaxed over the past few years to permit foreign ownership of airline carriers. Members of the European Union have been particularly interested in this business venture. This means that more and more foreign carriers are operating within the US. They are also bringing with them union or labor laws from their respective countries and this may not concur with the country's laws. In the recent future, the US government may restrict this proliferation. However, in the long run, the government may not have the strength to fight forces of globalization. The overall result is that the strength and influence of organized labor will be drastically reduced. However, this may take place thirty or forty years from now. (Dooley & William, 1999) It is also likely that bargaining power in the commercial aviation industry may reduce drastically in the future. This prediction may prove to be true owing to the fact that in the current political regime, minimal legislations has been enacted to improve pension schemes in the aviation sector or in other commercial sectors. This move indicates that there may be worse things to come in the future because current policy makers have little regard for these issues. The country is currently dealing with rising fuel costs and carriers are often looking for methods with which to cut costs. This means that issues such as pension schemes may not be top on their priority list. Unions within the aviation industry may have a difficult time trying to get such a point across and may meet resistance in the process. The future also looks dull for most airline workers associations. For instance, currently, there are numerous bureaucracies and processes that unions have to undergo in cases where they need to report pressing issues. Unless the US congress makes a complete turn around (in terms of their priorities) it is likely that the same trend may continue in the future. This prediction is an informed one owing to the fact that the government has currently banned union representation for employers in certain work groups such as those in the Department of Homeland Security. This goes to show that congress may not be committed to improve worker's conditions especially those ones within the aviation sector. (Robertson, 2008) As mentioned earlier, forces of globalization are affecting all parts of the economy. Consequently, the goings-on in one part of the world are likely to create a ripple effect in another part of the world. Since the United States airline industry conducts a lot of business with the European Union, it is likely that union patterns in those countries are likely to be replicated here. For instance, in the year 2008, British Airways pilots went on strike over the fact that the airline was opening up another division to be located in France and the US. The major problem with the new division was that it would serve as a pathway for reducing workers benefits as stated by Allied Pilots Association (based in the US). The latter group believes that this pattern is likely to affect carriers within the country because US airlines might discover the trick and copy the Britons. The American based worker's association normally collaborates with workers in British based airlines because they realize that what happens in those countries can trickle down to them. This cooperation between airline unions in two separate countries indicates the fact that more cooperation may occur in the future. Organized labor may become more international given the fact that workers are already interacting today. This factor will be especially prevalent because any form of industrial action that occurs within the UK is likely to trickle down to the US. Statistics show that close to seventy percent of airlines operating in the transatlantic region come from Britain. This means that organized labor in the US cannot be limited to local workers alone. It has to embrace principles in the international arena and this is likely to continue in the future. (Robertson, 2008) Aviation unions may have to deal with more outsourcing isuues. It should be noted that outsourcing both services and products has become a common phenomenon in most industries and the aviation sector is no exception. Many airline companies have attempted to outsource some parts of their operations and this severely hampers organized labor. Outsourcing creates room for airline companies to exploit their workers by giving them minimal wages or by making them work for longer hours than is acceptable. Since airline carriers are looking towards improving their overall profits, then it is likely that these respective companies may choose to direct their businesses to other countries i.e. outsourcing them. In such countries, US labor regulations do not apply and it is extremely difficult for workers to be protected in those areas. Consequently, the power of the airline union is likely to reduce in the future. The future of organized labor in the aviation industry may not be very promising in terms of long term agreements. Some of the issues that organized labor achieved in the past included; Prevention of wage reduction Promotion of working hour reductions Promotion of pension and health benefits Promotion of better working conditions Etc Organized labor in the airline industry had these collective effects because a substantial number of airline workers were unionized. However, this number is dwindling today and may continue doing so in the future. With reduced numbers of unionized employees, it may become very difficult for unions to try and change long term issues or issues that affect the entire industry on their own. Many employers are now dealing with workers who operate on an individual basis. The airline industry itself is not doing very badly as sixty two thousand employees are unionized under ALPA. However, other sectors of the economy are not witnessing such positive patterns. In fact less than eight percent of workers within the country's private sector are unionized. Today, these trends may be prevalent in certain production-oriented industries but they may trickle down to the aviation sector. If this occurs, then many workers stand to loose a lot in the future. The truth of the matter is that income inequalities in the US have hit an all time high and the same may be said of what is happening within the aviation sector. If organized labor had the same effect that it did some years ago, then these income inequalities would be non existent within the industry. Administrative officials and CEOs of major companies are earning much more than lower ranking employees. This implies that airline unions no longer have the effect that they did and this may continue in the future. (Gall and Zieger, 2002) The future of organized labor may not be as promising as one would like to imagine because of the dangers that might arise if unions grow large. As it is today, many unions within the aviation sector are not well coordinated. A number of airline carriers have workers represented by different unions. However, as the country progresses into the future, it is likely that larger unions will be formed. The problem with these large unions is that they act as barriers towards entry of new workers. Many union members feel that they have to protect their jobs by restricting competition for existing jobs. Consequently, certain groups that have been sidelined in the aviation industry (such as minorities and women) may continue to be alienated because of the protectionist tendencies associated with large unions. As a result of this, then the future does not look very promising for potential employees in the aviation sector. If union participation increases or decreases, there will still be problems in the industry; this looks like a loose-loose situation. In the future, it is likely that organized labor will turn towards a more collective approach between various industries. As it is today, many unions in aviation and other industries organize themselves as autonomous bodies. They are mostly concerned with issues revolving around their respective sectors alone. However, such an approach can be detrimental to unionized members because they may not garner enough clout to change governments or political groups. When one examines organized labor in other developed countries such as Germany or Britain, one can see that unions are organized along a series of industries rather than on the basis of one particular industry. Since the world is becoming increasingly global, it is possible that American aviation unions might start collaborating with other industry unions especially those ones that are closely related to the aviation sector. Consequently, such a move is likely to solicit positive change within the industry. Countries that have labor unions as opposed to trade unions or unions centered on one industry have witnessed positive changes. Their unions have greater bargaining power and they have the ability to change important issues such as wage inequalities. US unions have started realizing this and may adopt such a system in the future. If they do so, then employees will benefit tremendously from this. (Dooley & William, 1999) It is also possible that the aviation industry might record fewer cases of unionized workers. This is brought on by the fact that some large companies may think of unionizing their workers but may be afraid of all the issues that come along with it. For instance, organizing employees requires one to register with the federal state. There are tremendous issues that have to be considered in the process and these may act as impediments towards future profit making. This is probably the reason why some large aviation companies today have not organized their labor. Similarly, smaller companies are also grappling with the same issue. Most of them may want to create a good image for themselves by signing contracts with their employees on union membership. However, when small airline companies choose to do this, then they must part with substantial amounts of finances to unionize their worker and in the end, this hurts their profitability. The returns which they were supposed to use to cover their labor costs end up being harmed by the very labor that they are trying to cover. Consequently, these aviation companies have hit a wall. No particular group or stakeholder has demonstrated their commitment towards dealing with these obstacles and it is likely that the same problems may continue in the future. As a result, fewer employees will fall under the organized labor category in the future. For the aviation industry worker, things do not look as promising as they should be because a lot of wage cuts have been going on in the current environment. In the year 2003, three of the six major airline carriers entered into agreements with unions to reduce wages. These three companies were; American United US Airways Given the fact that labor unions can sit down and agree with unions on reducing wage cuts instead of fighting to increase them, then the future may not be very positive for workers in the airline industry. It is a known fact that some of the changes instituted by these respective groups caused substantial decreases in overall labor costs. However, these were offset by rising fuel prices. Many employees have had to cope with lower wages and this may continue in the near future because there are still certain operating costs that have to be minimized in the end. (Dooley & William, 1999) Since there are two major categories of airlines that operate within the aviation industry, it is likely that future trends in wage increments will be divided along these lines. While it has been established that wage increments do not look feasible in the future, it should be noted that there are certain categories of workers who will the feel the pinch more than others hence hurting the effect of organized labor. Low cost carriers are likely to keep their wage costs low by giving their respective employees minimal wages. On the other hand, employees in the major carriers are likely to receive slightly higher wage payments compared to low - cost carriers. However, it is likely that these differences will be minor. The overall trend is that many aviation employees will record lower wage levels in the future. Lastly, the six major US carriers have been looking towards establishing favorable collective agreements with their organized labor employees. Many carriers are trying as much as possible to bargain with unions on the amount of wages that they can pay their workers. If this continues in the future, then chances are that organized labor will loose its grip on changing employers' perceptions thus leaving employees at their mercy. (Yates, 2004) Conclusion The future may be either positive or negative for organized labor in the US aviation industry. However, negative aspects override positive ones. Some of the positive aspects likely to occur in the future include protection of whistle blowers, reception of loans from the government after the September eleventh attacks and better worker's deals during strikes. These positive aspects can only be instituted if the political transition taking place in the year 2008 yields a leader who supports organized labor. (Dooley & William, 1999) The future does not look very promising for organized labor in the aviation industry owing to a number of reasons. First of all, major carriers want to reduce labor costs and have been negotiating wage cuts with their unions. This occurred in 2003 and 2004 and the trends may continue in the future. Secondly, many companies are outsourcing their services to other countries where US labor laws do not apply and this makes employees very vulnerable. Besides these, the US private sector is witnessing unprecedentedly low numbers of organized labor. While the same patterns are not so prevalent in aviation today, they may permeate into it in the future. Additionally, organized labor may not yield fruitful results in the future because even if the number of unionized employees increases, they will restrict entry of other competitors in the market and this will be a loose-loose situation. Furthermore, forces of globalization are allowing foreigners a right to own US carriers. Such employers may not understand the principles of US organized labor. On top of the latter, it will be a problem trying to report problems faced by unions to higher authorities in the future because the same is occurring today. Lastly, organized labor may face severe impediments when trying to make long term changes because unions are organized on the basis of trade i.e. the aviation sector rather than on inter-industry basis i.e. labor unions. Reference Bigsky (2004): Alpa endorses Kerry, News release, No. 04.017, available at http://www.usaviation.com/forums/index.phpshowtopic=11336&pid=144336&mode=threaded&start=#entry144336 Robertson, D. (2008): Transatlantic fights face shut down as US pilots back BA protests http://www.usaviation.com/forums/index.phpshowtopic=40306 Yates, M. (2004): Why Unions matter, Monthly review press Gall, G. and Zieger, R. (2002): American Unions, Journal of American Workers, 12. 4. 56 Dooley, F. & William, T. (1999): Airline labor law: Aviation after deregulation, Quorum Publishers Read More