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

Bring back those good ole days of sweat shops and child labor. They are as American as apple pie and what made this country great !!!

Next bogus conservative opinion.

 

No offense, TJ, but you're one of the last guys we can expect to back-up someone critical of this administration.

I don't know the full truth of the numbers, but it's clear enough that Bush wants to define his presidency by war and not by jobs or education. Keep us afraid and then "protect" us by going after the bad guys. Problem is, like many far-right conservatives, he's better at inventing or building up enemies than he is at domestic issues.

And why should he try? Jobs (running the Texas Rangers, President of the United States of America - thank you, conservative-majority Supreme Court!) and education (Princeton?, Harvard Business School) have always been handed to him (this is definitely a state-school brain going to elite universities), even though he can afford to squander it all because daddy's name and money (and buddies) have always been there to save him again.

And slam unions all you want, but if we left everything to corporation management, we'd be in some deep doo-doo. Not to mention how management usually treats workers like cattle. Think I'm exaggerating? Full of it? Then I guess you're in management. If so, congratulations, that's fine, but it skews perceptions.

These views were brought to you from the great sludge of Middle Americans who have few job prospects in George W. Bush's Grand Ole U.S.A.

 

There are plenty of industries with high union membership. Your argument is very simple. Trucking, teaching, nursing, construction, steel, all of these industries have done well with dealing with unions. The main problem with airlines is their fixed cost are pretty inflexiable during economic slowdowns.
When you fly planes, whether you fill up a 200 seat flight, or it is only half full, your labor costs, fuel costs, costs,and maintinance costs all remain the same. At the same time it is a still a very price sensitive industry, as we have seen, during this recession, business people will simply choose to reduce their travel expenses to save money. The airlines' main source of revenue is business travel, and when the economy is running smoothly, they can pretty much count on a steady stream of revenue from this market, while offering discounts to vacationers who have flexability in their travel time.

 

Nurses join unions?

Never knew that (even with several nurses in my family).

Since Texas is a right-to-work state, perhaps the nursing unions aren't so strong (I know that my nurse relatives are no members of unions).

One of the ways that Southwest and jetBlue and whoever are able to have lower fixed costs is by having a fleet of airliners that are all the same basic model (usually the 737), which works well for their short-haul flights.

For an airline that has built a system that also includes cross-country, non-stop, as well as international flights, having all the same jets would be impractical, but that does increase the maintenance costs over someone like Southwest. It just costs more to keep a fleet of several different kinds of planes flying (both in maintenence costs and in turn-around costs and time).

Plus, Southwest can get lower wages from union workers because they've never furloughed any workers. Southwest workers don't worry about job security because of Southwest's history. With American or United, etc., the unions are going to make the same concession because they don't have the long history of offering job security.

 

The airline industry is structurally a mess. When it all comes down to it, I actually believe that this is one industry that should be regulated. Wow, as a staunch capitalist, I can't believe that I wrote that!

I struggle to find another industry where all the economic profits accrue to its employees. Essentially, when the company profits increase, the employees get a large wage increases. When the economy turns downwards, the airlines plunge into massive losses and the unions have to concede. The reason this is a bigger problem for this industry (unlike others where you have similar dynamics) is the very high fixed costs of running an airline coupled with the high amount of debt. Additionally, you are essentially selling a commodity which means price competition is viscious (sp?).

I believe Southwest is the only airline to have never suffered a quarterly loss (at least since IPO). This is largely driven by 3 things: They use the exact same plane model so their maintenance costs are very low; Their turnaround time for planes on the ground is ~1/3 of the industry average, allowing for greater utilization of planes, and lastly they do have lower wages. The company can offer lower wages not only b/c of their reputation, but also becuase they fly short routes. This means employees can spend more time at home, and are willing to take lower wages to compensate.

JetBlue will likely become profitable also, for a couple of reasons: a new planes, so more higher fuel efficiency (again though as other airlines get new planes, they will b/c of higher efficiency and price competition will result in profitability to erode). Additionally, Jet blue uses stock options as a way of additional compensation, so that cash salaries are less. This has been acceptable by employees b/c the stock has not cratered and performed well between their pre IPO value and post IPO price. United offered and the unions readily accepted stock options as part of their agreement ~5 years ago only to see their stock suffer. As employees realized stock options in airlines are most valuable as toilet paper, they opted for cash.

The joke about all this is that there are still investors out there willing to fund these companies. I would have no problem with this as I don't invest in these companies, so its one's own perogative. However, these companies often recieve government bailouts b/c they cannot withstand an industry downturn. Look at hotels. If people are flying less, hotel profitability also declines. However, hotels don't get the bailouts. If the government keeps having to bail out this industry, it should just regulate it.