Last month, the House aviation subcommittee held a hearing on the working conditions for airline ground workers. It was the first hearing the panel has held on the subject in the 32 years that Rep. Peter DeFazio (D-Ore.) has sat on it.
The discussion was overdue.
Anyone interested in delving into reasons for the growing wealth gap in the U.S. would do well to take a look at the airline industry. In 2018, the last for which full-year numbers are available, U.S. passenger airlines reported after-tax profits of $11.8 billion. Three years earlier, the industry had reported record after-tax profits of $25.6 billion.
As the industry has enjoyed unprecedented prosperity, American, United and Delta have spent $31.3 billion on share buybacks over the past six years, according to DeFazio.
In 2018, the CEOs of the Big 3 took home a combined $37.5 million in compensation.
The story, however, has been quite different for low-wage airline ground workers, such as caterers, baggage handlers, skycaps and wheelchair attendants. For those workers, wages have stagnated and in some cases have gone down over the past two decades as airlines have increasingly turned to outsourcing.
According to a recent study commissioned by the Communications Workers of America union and undertaken by economist Brian Callaci, the portion of employment that U.S. airlines outsourced increased from 19% in 2001 to 30% in 2018. The increases were much higher in specific sectors, however. Notably, the percentage of outsourced baggage porters jumped from 54% to 96%. Inflation-adjusted wages dropped by 12% over the period studied.
Meanwhile, wages have jumped for the heavily unionized sectors of the industry that airlines don't outsource. For example, pilots and flight attendants won inflation-adjusted wage increases of 20% and 24%, respectively, between 2001 and 2018.
At last month's House hearing, union representatives spoke of a contracted workforce in which many endure wages that don't cover basic expenses.
According to Marlene Patrick-Cooper, an organizer for the Unite Here union, 87% of the caterers for LSG Sky Chefs in Florida, Georgia, Texas and North Carolina make less than $15 per hour. Those states support hubs for each of the Big 3, all of which contract with LSG.
When I first wrote about this subject last July, each of the Big 3 declined to comment on their shift toward more use of contractors. Contracting companies, meanwhile, said they provide expertise and mission-focused operations to airlines. That's likely true in some cases. It's also true that sometimes, especially at smaller stations, it makes sense that airlines would share contracted ground workers for the sake of efficiency. Still, the dollars and cents tell a more cynical, overarching story.
One piece of good news is that local governments have begun to act. Twenty-one major-market U.S. airports are now governed by living-wage ordinances.
At Southwest's annual shareholders' meeting last May, I watched as a wheelchair attendant explained to CEO Gary Kelly that when Southwest switched contractors at LAX, her new employer stripped her of seniority and health benefits accrued over 13 years on the job.
"What are you going to do to make sure that your company, Southwest Airlines, only works with responsible contractors?" she asked.
Kelly said Southwest doesn't control the companies with which it contracts.
That's not good enough.