Labor unrest grows as airlines outsource jobs to contractors

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Airport workers organized by the Service Employees International Union protest outside the Southwest shareholders' meeting in Denver in May.
Airport workers organized by the Service Employees International Union protest outside the Southwest shareholders' meeting in Denver in May. Photo Credit: TW photo by Robert Silk

When it comes to staffing low-wage positions such as baggage handlers, skycaps and wheelchair and cart attendants, U.S. airlines have moved almost exclusively to outsourcing over the past two decades, but the skies ahead could get bumpy.

Recent worker actions, led by the Service Employees International Union (SEIU), have popped up as those and other low-wage contract workers are increasingly unionizing and winning legislative victories at large U.S. airports.

June 19, contracted workers staged protests at the Denver airport demanding better wages, training and working conditions. On June 27, they protested simultaneously at New York JFK, Washington Dulles, Miami and Fort Lauderdale airports.

Rob Hill, vice president of SEIU local 32BJ, which represents workers on the East Coast, said the day of protests in late June drew approximately 250 workers from Eulen America, a contractor that provides services that include baggage handling, wheelchair transport and cabin cleaning for American and Delta.

Eulen America CEO Xavier Rabell last week disputed Hill's estimate of protester turnout, asserting that only a "handful" of the company's workers joined the protests that day and that its operations at JFK and Miami were fully staffed.

In either case, it's difficult to dispute the growing restiveness among low-paid, contracted airport workers. The SEIU said that out of its more than 30,000 airport worker members, more than 11,000 have joined since 2016.

The union has also racked up a steady string of achievements. Seventeen major U.S. airports are now governed by living-wage ordinances, according to the SEIU, including, most recently, Denver, where a $13 minimum wage went into effect on July 1.

Meanwhile, it's not just SEIU members who are pushing for better wages and benefits. On June 24, 11,000 unionized airline catering workers in 28 U.S. cities voted to authorize a strike should they be allowed to do so by the National Mediation Board under the Railway Labor Act, which regulates job actions in the airline industry.

"I feel like the momentum around labor issues has expanded," said Liesl Orenic, a one-time baggage handler and now a professor specializing in labor movement history at Dominican University near Chicago. Previously, Orenic said, organized labor in the aviation industry was mainly confined to direct airline employees. But that has changed as outsourcing has surged.

According to Bureau of Labor Statistics data analyzed by the SEIU, airlines directly employed 75% of their baggage handlers and skycaps as late as 2002. But by last year, 96% of those workers were employed through contractors.

Meanwhile, 97% of wheelchair and cart attendants worked for contractors in 2018 compared with 59% in 2002.

As outsourcing has become a norm for those workforces, wages have plummeted. Bureau of Labor Statistics data, adjusted for inflation by the SEIU, reveals that those 96% of baggage handlers and skycaps who worked for contractors were paid a median wage of $11.39 per hour in 2018. By comparison, the 75% of such workers who were employed directly by airlines in 2002 had a median hourly wage of $27.18.

Among wheelchair and cart attendants, the drops were less dramatic, but the median wage of the almost entirely contracted workforce was still down approximately $3 per hour in 2018 compared with wages paid to the mixed contracted and airline-employed workforce of 2002.

Janitors who clean aircraft and airline-controlled spaces at airports have also experienced precipitous drops in wages since 2002 as what was already largely a contracted workforce grew even more so.  

Low wages don't only impact the workers, said Ken Jacobs, chair of the University of California-Berkeley Labor Center. They also cause increased turnover at airports.

Jacobs began researching the issue in 2000, the year the San Francisco Airport Commission instituted its Quality Standards Program, which initially raised the minimum wage for airport jobs that the commission defined as safety-related from $5.75 per hour to $10 per hour.

Among the workers impacted by the changes were baggage handlers, skycaps, wheelchair attendants and janitors.

In a 2003 study, Jacobs and his co-authors found that those wage increases resulted in a 44% reduction in turnover of cabin cleaners and a 25% reduction in turnover for ramp workers.

The Quality Standards Program today sets the living wage at $17.66 per hour (plus another $5.40 per hour if workers aren't provided health benefits).

Jacobs said that one thing that drove the San Francisco Airport Commission's decision to institute its Quality Standards Program was that there was a strong link between airport worker turnover and security. More turnover means fewer seasoned workers on the job, which in turn means fewer veterans on the tarmac and fewer experienced eyes in the terminal.

"People just have less experience," Jacobs said. "They don't know what to spot."

United, American and Delta declined to comment for this report on their move toward greater use of contracted workers in recent decades. But in emailed responses to questions, contracting companies said they offer airlines expertise and mission-focused operations.

"We believe the airlines prefer to focus on customer service and the arrival/departure process in regard to the direct airline operations," wrote Dan Coerber, chief administrative officer for S.A.S. Services Group, which provides wheelchair, janitorial, skycap and security services to mainline U.S. airlines at 12 western U.S. and Hawaiian airports.

LSG Sky Chefs, which caters for numerous airlines around the world, including the Big Three U.S. carriers, made a similar point.

"Airlines are generally focusing on their core competencies, i.e. flying, and leaving the catering to a provider who focuses on catering as core and can create synergies by working for multiple airline customers," the company said.

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