Statement by AFL-CIO President John J. Sweeney On Today’s Unemployment Numbers And th

What a sad piece of propaganda from the labor market distortion that is the AFL-CIO. What's worse about these blatant lies is that they cite the airline industry as an example of failed policy. What they fail to mention is that high labor costs which are the direct result of union activity have crippled the airline industry for decades. Without the presence of a free market system to determine fair and equitable wages in this industry, companies will continue to suffer abysmal levels of profitability and job loss will result. It is indisputable fact that artificially high wages lead to low levels of employment. Thank you, unions.

This article is a case study in hypocrisy.

 

While I do think the AFL-CIO dude is barking up some illegitimate trees (I, for one, get tired of people calling those families who make only $12,000 in taxable household income "rich", but that's neither here nor there), I do think the current administration is not doing enough to help the economy.

I understand there is only so much a President can do to spur economic growth (which is often "very little"), but those few things he can do - things like paying attention to the issues, appearing to be doing things to help the economy, not spending so much time on foreign affairs, etc - can be the difference between a sluggish economy and a less sluggish economy.

Consumer and business confidence is what often drives the economic engine. There's nothing physically wrong with the U.S. economy. The fact that people don't feel confident makes as big a difference as anything.

I'm not sure the President has the ability to make people feel better about the economy even without the war going on (a combination of his public-speaking skills and the fact that no matter what he does, opponents will call it a break for the rich, etc.), and even if he did, I don't know that it would make any real difference.

I do think the war (and the build-up to it) have harmed the economy. I think a lot of people have a "wait and see" attitude about a lot of things. While the threat of war was on the horizon (which it has been for some time), the nation was at a stand-still in many ways. Now that the war is on, I would assume a large number of people are waiting to see what it's like once the war is over.

But hey, we lost fewer jobs in March than we did in the last month of the Clinton Administration.

But hey, I don't know anything. I'm just spouting off.

 

What a sad piece of propaganda from the labor market distortion that is the AFL-CIO. What's worse about these blatant lies is that they cite the airline industry as an example of failed policy. What they fail to mention is that high labor costs which are the direct result of union activity have crippled the airline industry for decades. Without the presence of a free market system to determine fair and equitable wages in this industry, companies will continue to suffer abysmal levels of profitability and job loss will result. It is indisputable fact that artificially high wages lead to low levels of employment. Thank you, unions.


What a sad attempt to blame employees for the airlines' inabilities to manage their own finances. Smart airlines (Southwest) do just fine. The other airlines failed miserably in their strategies to have multiple prices for the same seats, offer way too many unprofitable flights, and get into dumb price wars with each other.

 

I assume Southwest's employees also cost them less money. I know United is talking about creating a spin-off, Southwest-like airline in an effort to curtail costs. One of the advantages mentioned in the article I read was that labor costs would be lower and more in-line with what Southwest pays.

But there's no doubt in my mind that a large part (if not the largest part) of the airlines problems are management-related.

 

That's funny, I thought the plural form of a noun implied two or more. You cited one example. That to me would necessitate the use of a singular noun, not a plural noun. The fact that only one company in the airline universe is able to turn a meager profit is clear and direct evidence that the industry has poor fundamentals. You obviously have absolutely no experience in the business world if you are incapable of understanding that unions have forever been the chief culprit of decreased profitability in this industry. I recommend that you do a little research into some of the takeovers from years past. Read about Frontier Airlines. Read about TWA. Tell me what the very first negotiating point is for any potential buyer. LABOR COSTS. Then think to yourself, "what in the world could be forcing labor costs so high?" "Why are other industries not suffering the same problems" "Why is labor productivity so low yet wages are so high?" Any simpleton could recognize that a distortion exists in this market for labor. Unions have caused this distortion. Unions have forced mothers and fathers into unemployement, they have bankrupted many airlines, and they have ruined many lives.

There it is folks! The secrets to airline industry profitability unlocked! Business guru Major has figured out what millions of employees in the airline industry have failed to grasp for decades! Nice try, rookie.

 

I tell you, I now know why I've never become a statistician.

I was looking at the historical unemployment rates, though, and it is somewhat interesting that the unemployment rate in April, 1995 was also 5.8% (and was 5.4% in March of 1995 - which would be the month in the Clinton administration that corresponds to March in the current Bush administration), but that seemed like a good economy then. And it seems like a really bad economy, in terms of unemployment, now.

(just for the record, at the equiv. time in the Reagan Administration, the unemployment rate was 10.3%, and it was 6.8% in the first Bush adminstration. It was 5.8% under Carter at this time in his administration, and 4.4% under Nixon.)

 

And just because I've got the page pulled up, the unemployment rate for Ike in March, 1954 was 5.7%, as it was for Kennedy in March, 1963. LBJ is the winner in the lowest unemployment rate 25 months into his presidency, though, at least since the record on the page only goes back to 1948. LBJ posted a low, low, low 4.0% (in January of 1966).

As a matter of fact, I'm pretty sure that LBJ has the lowest average unemployment rate of any of the Presidents since that chart started (you can't count Truman since his full term is not represented. So, we've got Eisenhower, Kennedy, Johnson, Nixon, Ford, Carter, Reagan, Bush I, Clinton, Bush II).

 

Darn it. I should've posted Ike's for 1955 (when it was 4.6%).

 

Hey! Look over there....it's Bart! He's doing stuff!

 

There it is folks! The secrets to airline industry profitability unlocked! Business guru Major has figured out what millions of employees in the airline industry have failed to grasp for decades! Nice try, rookie.

Funny coming from someone who just "conclusively" blamed unions for airline failures.

It's not just me that knows this - lots of people who've studied the industry see it. Just because you like blaming unions doesn't mean its true.

http://www.planebusiness.com/perspectives/perspectives070998darryl.html

This is a study on new entrants, but it has some useful stuff:

<I>
To test this hypothesis further, a series of models were built to predict financial distress. We were amazed to find how easy it was to predict the eventual insolvency of an airline. Our model predicted bankruptcy as far as 18 months from the actual event. The ability to accurately forecast bankruptcy was significantly reduced when we included ownership of CRS in the model. Our models showed us that all that was needed to forecast an airline's eventual insolvency were internal operating statistics — things that are under the control of management.

...

There was a period during the early 1990s when the ability of the major airlines to survive was called into question. Loaded down by debt, battered by constant price wars, crippled by rising fuel prices and weakened by a poor economy, the airlines' outlook was bad.

...

The success of Southwest is unique in airline history and can be attributed to successful management of growth, careful selection of market entry, and tremendous efficiency and discipline in operations. In twenty years Southwest has retreated out of only two markets. When Southwest enters a market, it stimulates traffic by significant amounts, it competes aggressively with the majors, and has never once claimed it has been the object of predation.
...

Over 97% of the carriers filing for Chapter 11 bankruptcy during the 1990's had senior executives who had been involved in a previous Chapter 11. Over 75% had executives who were involved in 2 bankruptcy filings, and over 50% have had executives who have been involved in at least three bankruptcy filings. 15% of the carriers filing for Chapter 11 bankruptcy during the 1990s had senior executives who had been involved in at least four bankruptcy filings. One person has been involved in five airline bankruptcies.
</I>

It's perfectly possible to be successful in the airline industry if you do it right. The fact that there is a lack of good management out there is not the fault or problem of unions. I'm not a fan at all of the unions, but don't blame them for management failures.

 

I'm loving this Bureau of Labor Statistics site.

Did you know, for example, that the United States is projected to add 38,000 musicians and singers from 2000 to 2010.

I guess that's why we need shows like American Idol.

 

Did you know that the median annual income for a crossing guard is $17,400?

 

Major:
Objection, relevance. We're talking about the airline industry here which is dominated by long time players. United, American, Delta, Northwest, etc. New entrants are a tiny fraction of the airline market and therefore can not be used in your argument.

I noticed how you selectively ignored the meat of my rebuttal. Here it is again: Answer it or admit defeat.


That's funny, I thought the plural form of a noun implied two or more. You cited one example. That to me would necessitate the use of a singular noun, not a plural noun. The fact that only one company in the airline universe is able to turn a meager profit is clear and direct evidence that the industry has poor fundamentals. You obviously have absolutely no experience in the business world if you are incapable of understanding that unions have forever been the chief culprit of decreased profitability in this industry. I recommend that you do a little research into some of the takeovers from years past. Read about Frontier Airlines. Read about TWA. Tell me what the very first negotiating point is for any potential buyer. LABOR COSTS. Then think to yourself, "what in the world could be forcing labor costs so high?" "Why are other industries not suffering the same problems" "Why is labor productivity so low yet wages are so high?" Any simpleton could recognize that a distortion exists in this market for labor. Unions have caused this distortion. Unions have forced mothers and fathers into unemployement, they have bankrupted many airlines, and they have ruined many lives.

 

The unemployment rate stays fairly stable.

Here's a simple way to explain why 1995 with an unemployment rate of5.8% is different from 2003 with an unemployment rate of 5.8%.

If 100,000 people get laid off from jobs paying 50,000k a year but 100,000 jobs are created that pay 30,000k a year then the unemployment rate would remain static but quality of life would go down.

 

OR, because it was 5.8% after it had been in the 7% range, it looked good, while the 5.8% after a long while of unemployment dipping into the 4% and even down to the upper 3% range just prior to the election seems bad.

Plus, did 100,000 people get laid off from $50K jobs and replace them with $30K jobs? Where do I find that data?

 

That wouldn't help. It needs to be something about wages, though I'm not sure how that would help, either (the average wage overall has gone up, but we really need it broken down further)