Market based compensation vs. union negotiated pay

wheelsup

wheelsup

Well-Known Member
In most industries your pay is dictated by the market. That is if your skills are in demand, and you bring added value to the company your pay will reflect that (for example an experienced CEO). If you have a mediocre skill set that a lot of people have (say stocking grocery shelves).

While I support the idea of a union and protection and all, I have to say I am partially against how unions see themselves as needing to increase the pay for their workers.

Shouldn't the pay for the position be set by what the market is willing to compensate that person for their skills vs. some value that the union places on that employee?

If you owned a business, and employed two people who made widgets. One guy cranked out 3 widgets an hour the other made 5. Yet both are paid the same? How fair is that? What incentive does the guy who makes more money for you to continue to make 5 widgets an hour?

Do you think unions protect people who shouldn't be protected? Let's say you have a pilot who routinely defies company procedures? The union is obligated to represent them. But should they be?
 
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No, it's a serious question/discussion topic I think. Folks at the big legacies point out how the other carriers like jetblue, allegiant, etc. are undercutting them but it seems to me they are simply paying market wages for their pilots.

While we don't make widgets we are essentially heavy equipment operators. I'm mostly playing devils advocate here, but understand that the rest of the world outside of pilots think unions are simply a way for workers to extract blood from a turnip and are what killed American industrialism and caused the offshoring of manufacturing jobs.

I would bet most of us here are against monopolies when it comes to gasoline companies, power generation, water supply, etc. but yet we are for monopolies for labor (don't get me wrong, I like the union as well).
 
If you owned a business, and employed two people who made widgets. One guy cranked out 3 widgets an hour the other made 5. Yet both are paid the same? How fair is that? What incentive does the guy who makes more money for you to continue to make 5 widgets an hour?
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Let me translate this for airlines:

If you owned an AIRLINE, and employed two PILOTS who made AVAILABLE SEAT MILES. One guy cranked out 3 ASM's an hour the other made 5. Yet both are paid the same? How fair is that? What incentive does the guy who makes more money for you to continue to make 5 ASM's an hour?
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The answer is NONE! And thats GOOD! There shouldn't be any incentive to 'push the envelope'.
 
OK I can see the ASM analogy. Yet quite a few on here argue that all pilots simply do the same job.

Why are pilots that fly corporate aircraft compensated significantly more than the current day airline pilot?
 
wheelsup said:
No, it's a serious question/discussion topic I think. Folks at the big legacies point out how the other carriers like jetblue, allegiant, etc. are undercutting them but it seems to me they are simply paying market wages for their pilots.

While we don't make widgets we are essentially heavy equipment operators. I'm mostly playing devils advocate here, but understand that the rest of the world outside of pilots think unions are simply a way for workers to extract blood from a turnip and are what killed American industrialism and caused the offshoring of manufacturing jobs.
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Current market dictates that all pilots on ANY type of equipment should be paid only $10 an hour. There are tons of pilots on the street making no money.

In short, during a recession and furloughs, the union is needed to keep the pay at its level otherwise a company could just bring down the pay because they can. Then during an economic rise and there is a pilot shortage union and pay sucks because the company could raise pay to bring on applicants, but a company wont pay more because they have a contract at a certain pay level and we cant negotiate a higher pay because we have to negotiate everything.
 
OK. Current market dictates that a lot of professional employees might take pay cuts too but they aren't. Because employers want to attract a certain skill set and quality employee that a given pay rate will attract.

Is it the seniority pay system that causes low pay then? The knowledge that first year pay might be $10*/hr but second year it jumps to $15* or $17*? And 2-3 years later with luck they are a CA making $30/hr*?

The hope that at a place like jetblue you upgrade quick and not get stuck making an adjusted $25/hr* for 5-10 years on a large aircraft?

*Based upon a real world pay scale of 40/hrs a week.
 
wheelsup said:
OK I can see the ASM analogy. Yet quite a few on here argue that all pilots simply do the same job.

Why are pilots that fly corporate aircraft compensated significantly more than the current day airline pilot?
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Current day regional airline pilot. As we discovered working at McDonalds is of greater compensation than that. I'm not aware of any corporate pilots, excepting perhaps 'personal pilot of someone rich or famous' who is compensated higher than a mainline airline pilot. NetJets is for the most part equivilant, once you get into large cabin and BBJs.
 
How about the freight pilots? Airnet guys made what, mid-$30's to start in a Baron or Cessna Caravan? Why are they making more than a co-pilot of a $20 million dollar aircraft?

Don't say mins, there are numerous regionals out there that had similar mins to 135 reqs before the bottom dropped out, and they didn't have a problem filling classes (Skywest and Compass come to mind).
 
OK what about in the 90's, the mins were significantly higher (here it was 2500 TT, 1000 turbine) but pay was still paltry.

Regional/commuter pay has always been low, regardless of mins.
 
wheelsup said:
OK what about in the 90's, the mins were significantly higher (here it was 2500 TT, 1000 turbine) but pay was still paltry.

Regional pay has always been low, regardless of mins.
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Pay at Mesa used to be $0.05/mile at one time (10 cents/mi for the CA.)
I wasn't in the industry back then but my speculation is that it was a combination of an oversupply of pilots and an undersupply of jobs and the concept of a regional airline was still for the most part just a stepping stone, they almost all flew turboprops on short commuter routes. The idea of paying your dues at some regional for a couple years before getting hired at United or whatever hadn't been demolished yet.
 
Compensation is entirely based on demand. As long as so many people want to be airline pilots, the cost to "buy" airline pilots will be low. Not as many people want to do things like freight, alaska, banners, odd jobs in aviation, etc. thus the pay in these sectors is higher, and the tops out earlier. (Max pay is probably around 100K depending on the company) At the bigger shiny jet companies, the pay goes higher and higher not because of the seniority based system but because the company has invested significant quantities of manhours and dollars and they need to provide some sort of incentive to prevent their crews from going someplace that will pay them more. That's more or less how I see it. Correct me if I'm wrong, but under the free market, there is only so low that pilots can be paid before airlines will start "stealing" crews from other airlines, so the natural sort of order is based on years in service at the company not the ammount of ASMs you are creating. Naturally, the unions create an inertia that prevents rapid wage changes in both directions (which is good) as everything has to be negotiated.
 
SpiraMirabilis said:
Pay at Mesa used to be $0.05/mile at one time (10 cents/mi for the CA.)
I wasn't in the industry back then but my speculation is that it was a combination of an oversupply of pilots and an undersupply of jobs and the concept of a regional airline was still for the most part just a stepping stone, they almost all flew turboprops on short commuter routes. The idea of paying your dues at some regional for a couple years before getting hired at United or whatever hadn't been demolished yet.
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How many miles per day?

I know guys who were paid by the pound to fly fish off of the beach. Guess how heavy they were?
 
In 2006/2007 the hiring market was particularly good for pilots. Lots of jobs, lots of places hiring. Why is it that the non-union places didn't have a problem finding qualified, intelligent applicants? You don't hear about Allegiant putting one into the ground because their pilots are inferior to those at say United. Yet they are paid half as much.
 
wheelsup said:
In 2006/2007 the hiring market was particularly good for pilots. Lots of jobs, lots of places hiring. Why is it that the non-union places didn't have a problem finding qualified, intelligent applicants? You don't hear about Allegiant putting one into the ground because their pilots are inferior to those at say United. Yet they are paid half as much.
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Pay isn't everything either, you have to enjoy what you do, and you have to have some sort of quality of life (that to me is the big one) I got to fly cool beech 1900s but I was working 6 days per week, and at all hours of the day and night.
 
ppragman said:
At the bigger shiny jet companies, the pay goes higher and higher not because of the seniority based system but because the company has invested significant quantities of manhours and dollars and they need to provide some sort of incentive to prevent their crews from going someplace that will pay them more.
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Are you talking regionals when you say bigger shiny jet companies? I've always heard, not 100% sure it is correct, that most regionals really desire a up and out policy. In other words, it is cheaper to train a guy and for a guy to stay no more than a few years, get a year or two PIC and then head over to the majors. Management wants minor league crews and the pay as well. I think from our viewpoint the paradigm has changed, but not sure about theirs. Just a theory and may not be applicable to all Regionals, but it's certainly my world view.
 
granlistillo said:
Are you talking regionals when you say bigger shiny jet companies? I've always heard, not 100% sure it is correct, that most regionals really desire a up and out policy. In other words, it is cheaper for a guy to stay no more than a few years, get a year or two PIC and then head over to the majors. Management was minor league crews and the pay as well. I think from our viewpoint the paradigm has changed from our viewpoint, but not sure about theirs. Just a theory and may not be applicable to all Regionals, but it certainly my world view.
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No no, legacies/majors. The regionals seem to think that training is cheaper than paying pilots, which doesn't seem to compute to me, anyone know the cost of a q400 type by chance?
 
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