Outten & Golden: Empowering Employees in the Workplace

Posts Tagged ‘wage stagnation’

Union to Southwest: $1,000 worker bonuses don’t make up for years of stagnant pay

Thursday, January 4th, 2018

Southwest Airlines this week announced that it would be awarding its employees with a $1,000 bonus following the passage of the GOP tax bill, which the company’s board of directors said would “result in meaningful corporate income tax reform.”

Union leaders say it hardly makes up for years of unfair treatment.

“We applaud Congress and the President for taking this action to pass legislation, which will result in meaningful corporate income tax reform for the transportation sector in general, and for Southwest Airlines, in particular,” Southwest chairman and Chief Executive Officer Gary Kelly said in a statement on Tuesday. “We are excited about the savings and additional capital, which we intend to put to work in several forms — to reward our hard-working Employees, to reinvest in our business, to reward our Shareholders, and to keep our costs and fares low for our Customers.”

Kelly added that the company was prepared to donate “an incremental $5 million” to charity and increase business investments in Boeing.

Union bosses representing those employees, however, aren’t completely satisfied, saying that many of those same workers have gone without a raise for five years.

“The Aircraft Mechanics Fraternal Association (AMFA) represents more than 2,700 Aircraft Maintenance Technicians (AMT) at Southwest Airlines (SWA). As of today, the Union has been in negotiations with SWA for more than five years (1,966 days), since the contract amendable date of August 16, 2012,” AMFA National Director Bret Oestreich told ThinkProgress in an email. “Although many members are appreciative of the Company’s recent $1000 bonus in response to the newly passed tax bill, this is a small token of appreciation for what the AMTs have endured over the last 1,966 days.”

While Southwest ratified a collective-bargaining agreement with AMFA-represented Facilities Maintenance Technicians (FMTs) in November last year, it still has yet to reach an agreement with its AMTs. Such an agreement would likely award aircraft technicians with protections and benefits similar to the ones awarded to the facility technicians, which currently include a “complete set of work rules, wage scale, ratification bonus, and job protections,” according to a Southwest news release.

“While the Company experienced record profits during this time, our members have not received increases in pay, enhancements to benefits or, most importantly, job security as they threaten to outsource even more work to 3rd party vendors,” Oestreich explained.

He added, however, that he was “optimistic” Southwest and AMFA would reach a “well-deserved, fair and equitable agreement” by the end of the next union negotiation session, which is set for January 18-19 in Washington, D.C.

Southwest spokespersons did not immediately respond to a request for comment.

Southwest is only the latest company to announce worker bonuses following passage of the Republican tax bill. In December, a handful of businesses — including Fifth Third Bancorp and AT&T — stated that they would be doling out one-time bonuses to their employees as a result of the bill, which carves out massive benefits for major U.S. companies by lowering the corporate tax rate to 21 percent. Many companies also announced that they would be “reinvesting” in their businesses, although, as ThinkProgress previously reported, a large portion of that money will likely be used for share buybacks.

Union leaders at the time were equally unimpressed by those announcements.

“Republican leaders have promised that households would receive, on average, a yearly $4,000 wage increase. They also claimed that the corporate tax plan would produce new jobs in the U.S. as companies return work from offshore,” a spokesperson for the Communications Workers of America (CWA), whose workers are employed by AT&T, told ThinkProgress in an email. “[The $1,000 bonus AT&T announced is] a drop in the bucket compared to what was promised.”

UPDATE: In an email to ThinkProgress on Wednesday evening, a Southwest spokesperson addressed the recent bonuses and related AMFA union concerns. “The bonus is to celebrate the tax reform legislation with all of our Employees. It is not in any way meant to address the contract negotiations with AMFA,” they stated. “We’ve had an industry-leading offer on the table that includes raises for some time now.”

They added, “[We] remain committed to negotiating an agreement that sufficiently rewards our Aircraft Maintenance Technicians, while at the same time preserving our competitive edge.”

This article was originally published at ThinkProgress on January 3, 2018. Reprinted with permission. 

About the Author: Melanie Schmitz is an associate editor at ThinkProgress.

Five Causes of Wage Stagnation in the United States

Tuesday, January 13th, 2015

Kenneth QuinnellA series of recent reports from the Economic Policy Institute (EPI) make clear the case for why wages have stagnated in the United States.

Before digging into the details, it’s important to note a few things. First off, wage stagnation is not a small problem, it’s something that affects 90% of all workers. As one of the authors of these reports, Lawrence Mishel, says: “Since the late 1970s, wages for the bottom 70 percent of earners have been essentially stagnant, and between 2009 and 2013, real wages fell for the entire bottom 90 percent of the wage distribution.” Second, while the Great Recession made things worse, the problem goes back 35 years. And third, and most importantly, wage stagnation is a matter of choice, not necessity.

Here are five real reasons why wages have stagnated in the United States.

1.  The abandonment of full employment: For a variety of reasons, policy makers largely have focused on keeping inflation rates low, even if that meant high unemployment. A large pool of unemployed workers means companies are under less pressure to offer good wages or benefits in order to attract workers. Since the Great Recession, austerity measures at all levels of government have made this problem worse. EPI says excessive unemployment “has been a key cause of wage inequality, since research shows that high rates of unemployment dampen wage growth more for workers at the bottom of the wage ladder than at the middle, and more at the middle than at the top.”

2. Declining union density: As extreme pro-business interests have pushed policies that lower union membership, the wages of low- and middle-wage workers have stagnated. Higher unionization leads to higher wages, and the decrease in unionization has led to the opposite effect. The decline in the density of workers covered by collective bargaining agreements not only has weakened the ability of unionized workers to fight for their own wages and benefits, but also their ability to set higher standards for nonunion workers. EPI notes: “The decline of unions can explain about a third of the entire growth of wage inequality among men and around a fifth of the growth among women from 1973 to 2007.” Read much more about the connection between the decline of collective bargaining and wage stagnation.

3. Changes in labor market policies and business practices: EPI argues: “A range of changes in what we call labor market policies and business practices have weakened wage growth in recent decades.” Among the numerous changes they describe include: the lowering of the inflation-adjusted value of the federal minimum wage, the decrease in overtime eligibility for workers, increasing wage theft (particularly affecting immigrant workers), misclassification of workers as independent contractors, and declining budgets and staff for government agencies that enforce labor standards.

4. Deregulation of the finance industry and the unleashing of CEOs: The deregulation of finance has contributed to lower wages in several ways, including the shifting of compensation toward the upper end of the spectrum, the use of the financial sector’s political power to favor low inflation over low unemployment as a policy goal, and the deregulation of international capital flows, which has kept policy makers from addressing imbalances, such as the U.S. trade deficit. EPI adds: “Falling top tax rates, preferential tax treatment of stock options and bonuses, failures in corporate governance, and the deregulation of finance all combined to increase the incentive and the ability of well-placed economic actors to claim larger incomes over the past generation.”

5. Globalization policies: Decades spent in pursuit of policies that prioritized corporate interests over worker interests led to lowering of wages for middle- and lower-income workers in the United States. EPI concludes: “International trade has been a clear factor suppressing wages in the middle of the wage structure while providing a mild boost to the top, particularly since 1995.”

This blog originally appeared on aflcio.org on January 15, 2015. Reprinted with permission.

Author’s name is Kenneth Quinnell.  He is a long-time blogger, campaign staffer and political activist.  Before joining the AFL-CIO in 2012, he worked as labor reporter for the blog Crooks and Liars.  Previous experience includes Communications Director for the Darcy Burner for Congress Campaign and New Media Director for the Kendrick Meek for Senate Campaign, founding and serving as the primary author for the influential state blog Florida Progressive Coalition and more than 10 years as a college instructor teaching political science and American History.  His writings have also appeared on Daily Kos, Alternet, the Guardian Online, Media Matters for America, Think Progress, Campaign for America’s Future and elsewhere.

Your Rights Job Survival The Issues Features Resources About This Blog