Why can't wages keep up with CPI?

[Chadzat]

This is in reply to another post on the Ansett thread in Reporting Points.

Now, let me just start by saying this will more than likely open up a can of worms between those on here that own a business and those that are employees (pilots). I don't expect a resolution in a pprune thread, but some discussion on the topic...

Why is it that wages for pilots (and to a certain extent other professions) have been UNABLE to keep up with CPI increases in the past 10-15 years? I only use 10-15 years because I have not researched any further back and was too young to be working back then!! :sad:

Why is it always such a struggle that whenever a new GA Pilot Award or EBA in certain companies comes up for negotiation/re-issue that pilots have to fight tooth and nail to achieve an increase that is even close to CPI (read-inflation). I am not for one minute saying that each time new working agreements are made that outlandish 5% PLUS increases are required, however each time an agreement is made with increases LESS than CPI, you are effectively going backwards. 3% per year is NOT a huge increase in the scheme of things when everything else should also rise by that amount, so why are pilots expected to live on LESS each year?

I don't need to go over the latest examples of airlines always crying poor to screw down real wages. They are well documented on this site. By the same token, if the company you work for at the time is GENUINELY STRUGGLING, then if it means a choice of getting little to no pay rise versus losing your job, then obviously there is a valid reason for tightening the strings. However this is not always the case.

Does it not get back to the business case for the company in question, that if they cant afford to pay their pilots the going rate INCLUDING annual pay rises in line with CPI, then they need to have a good look at things.

(I would like to keep the discussion about startup airlines offering substantially less wages for initial pilots separate from this one as I feel that is an altogether separate issue. :ugh:)

[The_Pharoah]

whoa, wide-ranging question(s) there. Here's a couple of pointers I've learned over the years in business:

1. first and foremost, the owners are running a business. They are the ones who risk all in order to make money and have to balance everything on a daily basis.
2. this leads them to make decisions which first and foremost benefit them as owners, and then their most important people and so on.
3. in the aviation business from what I can glean, they know that young pilots need a job to get hours so that they can end up in a shiny new jet and so are willing to work for whatever pittance they can get (rightly or wrongly) but will bolt as soon as VB or QF come knocking. This leads to a lack of 'loyalty' so to speak.
4. there are a few ways to grow your business...inc revenue (organically or by strategic acquisition), dec costs or both (usually both). When revenues aren't growing (eg new contracts, no more tourist flights, etc), owners focus on cost reduction of which payroll-related expenses is a major part (other than a/c related costs...but hey this is aviation). So if they can reduce it they will...and they do.
5. Noone said it had to be fair. Unfortunately thats the truth.

Now my post is a bit dis-jointed however all I'm saying is that you need to put yourself into the shoes of an owner and perhaps you can then start to understand why they do what they do. I'm NOT an owner and in about a year or so I will also be fighting for a $15/hr flying job, however I'm just stating the facts as I see it. This applies to both small and large companies when you break it down to its base elements -> $$$. :}

[Lodown]

Supply and demand.

Aviation is a mature industry. Pilots are easy to come by. Want a job that pays buckets? Jump into internet and cloud hosting and apps.

[bentleg]

Well said Pharoah

Another way of looking at it. If the employer wants to give you a raise equal to the CPI, in addition to what he gives you, he has to foot compulsory super contributions, payroll tax in some cases, maybe more coffee in the tea room, and a multitude of "fringe" costs associated with your employment. So the employer has to be increasing his income by more than the CPI to pay for it. If your employer is doing really well you might (or might not) get an increase equal tothe CPI.

At the end of the day, it is supply and demand that determines what you get paid. Only when pilots are scarce, does their pay go up.

Another ingredient that can affect your pay is your performance. If you increase the value of your contribution to the business, the employer might recognise your value to his business with a pay rise. This doesn't happen to people regularly patronising the coffee room and deck chairs.

[neville_nobody]

At the end of the day, it is supply and demand that determines what you get paid. Only when pilots are scarce, does their pay go up.


No it doesn't. Unfortunately in aviation many of the CEO's and owners are what I call selective capitalists. They love capitalism when it works in their favour, when the tide turns then they're the biggest wingers imaginable.

REX proved this a few years ago when they were losing staff hand over fist and refused to enter into any sort of negotiations and would rather cancel flights than address the crewing situation.

Same at QantasLink. Geoff Dixon naively suggested that Australia needed to be more inline with the Asian cost base conveniently forgetting that Asian carriers pay for the entire cost of training pilots!! :ugh: Of course no journalist knew enough about the industry to point this out to him at the time. He also denied there was a pilot shortage.

V Australia came out with arguably the cheapest wide body salaries in the Western World.

So at the end of the day unless pilots are prepared to hang tough in salary negotiations then nothing will change and salaries will continually fall, until such a time that there is a genuine crisis because noone is stupid enough to pay $100K for a job that ends up paying peanuts. Then they'll probably try and poach pilots from overseas.

[Fr8dog44]

All of you speak well and bear some truth, maybe I can add to some of it.

It's good to see things from the perspective of the owner. They do indeed face chalenges in running a company. Smaller and or start up companies will usually be the ones that may infact be suffering. I personally have worked for big, small and medium size companies so I've seen much.

One of you mentioned you aren't old enough to go back more than 10-15 years and couldn't comment. Well, I've been in aviation since 1974 so allow me to shed some light. There was once a period called "The Golden Age of Aviation". The airlines were regulated, operated at a profit and paid employees well, also airfares weren't exactly cheap. Then, 2 things occured, deregulation and Frank Lorenzo. Frank Lorenzo wrote a thesis on how to bust up the unions while attending Harvard and was praised by his professors for his inventive ideas. Jimmy Carter signed into law the deregulation of Airlines. It was sort of a perfect storm. Frank Lorenzo was the CEO of the Texas Air Group which owned Eastern and Continental. Continental was non-union at the time as it was a new airline. Frank put his plan into motion, Eastern employees went on strike and actually hired low time pilots off the streets to replace striking pilots. It was amazing how many pilots crossed the picket line. This alone signaled to the owners of air carriers of just how low some pilots would go. As the strike went on, Eastern was losing money so Frank began selling off the assets of Eastern to Continental at bargain basement prices until there was nothing left. Where do you think Air New Zealand got the idea from when they stripped and destroyed Ansett!? So, at this time, air carriers are now being run by bean-counters, regualtion is history and air carriers are now at each others throats. Since pilots were so eager to whore themselves for lower wages, it started a snowballing effect the reached into every corner of aviation. This "I'll do it for less money just to get the experience" started happening in all areas of flying. So all those slick pilots who thought they were getting ahead were basically ruining it for all pilots to come. We've also seen CEO's and Board Members here in the States giving them selves outrageous pay raises and Golden Parachutes while the companies were going broke and forcing employees to to take salary cuts and other concessions to help pull all those air carriers out of bancruptcy. Many of the problems we're seeing basically stem from greed and yes, there are other companies that just couldn't get a break or otherwise compete.

So, from my experience, pilots aren't getting paid decent wages or adequet raises not only because some of your predecessors prostituted themselves and because owners don't have to! When one pilot leaves because he or she didn't get a raise, there will be 1000 pilots lining up to take the job whatever it pays, and the owners know it!!

[Howard Hughes]

My wages have kept up with, if not outpaced the CPI in the last three years!:eek:

Sadly the CPI is not an accurate indication of what it costs to live and I seem to have less money left over for a scotch at the end of the fornight, even with the payrises!:{

[Falling Leaf]

Another factor to consider, the price of oil!

Oil 15 years ago was stable at 25 USD a bbl. Oil is now 70 USD a bbl.

And last year oil hit 147 USD a bbl and helped crash the economy.

Kerosine and salaries are an operators 2 biggest costs. If a company has to pay more for one, it will look for savings from the other...

[bentleg]

When one pilot leaves because he or she didn't get a raise, there will be 1000 pilots lining up to take the job whatever it pays, and the owners know it!!


So I'll say it again -


At the end of the day, it is supply and demand that determines what you get paid. Only when pilots are scarce, does their pay go up.

[Torres]

Because:

Aircraft operating costs continue to increase;

The cost of air travel continues to decline;

The only variable is the labour cost.

[Mr. Hat]

Because most pilots ain't got the balls to stand up come EBA time. Its easier to whinge on the flight deck.

[Crescent]

Wage / price spiral anyone? That is usually the excuse that gets a run when the question is asked regarding inflation. It is usually more supply/demand than anything else. Niche employment attracts high salaries due to low supply and acceptable demand for a business owner. Oh the joys of economics......

[psycho joe]

The problem in Australia is that the industry is too small to support any real competition. i.e.;

If you are a jet captain in Australia you fly for one of three companies;

1) QANTAS

2) VIRGIN

3) TIGER

If you don't like your EBA conditions and you want to live in Oz then your choices are;

1)QANTAS - psychometric evaluation which you may have already failed ruling this company out entirely, followed by demotion to FO or SO.

2) VIRGIN - being a drop in pay and conditions if you already work for QANTAS.

3) TIGER - lower pay & conditions than the guy operating the airport x-ray machine.

Supply & demand will never be in our favour in this country and management well knows it. So rather than pilot groups shrugging their shoulders and mumbling "supply and demand" at every EBA, Id rather that those that represent us embark on a wide ranging strategy of education (public) and coercion with regard to the benefits of happy healthy people charged with public safety.

[PlankBlender]

psycho_joe is on the money, the size of the Oz pilot group is both the biggest problem and the biggest opportunity.

The problem is obvious, there are too many new pilots each year for every experienced one, hence the wage pressure.

The solution is easy in theory, but it seems no organisation has had the cohones yet to put it into action: Write to all pilots and promise at least CPI increases at the next EBA, in return demand as success fee a proportion of the pilot's net gain sufficient to run the organisation. With enough pilots signed up (and why wouldn't they, no immediate risk or cost, much potential gain), take the aviation companies by the short and curlies and twist hard: demand, strike, publicise, and don't let up until you've got what you need, and if a few smaller operators go under, so be it, they most likely weren't viable to begin with, and the work which of course doesn't go away will go to other better operators.

Prices for (mostly domestic) travel will go up somewhat, although with good PR the public will understand and support that. Rises will be limited, and in effect we'll pay a wee bit extra through our taxes with the high yield government flying in this country (look at sizes of government in Oz vs the rest of the developed world if you like to be stunned)..

Once established, such a representation could in a second phase lobby government effectively (because they wield actual power through representation and the threat of mobilisation) to regulate the c@nts that exploit young pilots by effectively tightening up the award and actually forcing employers to adhere to it completely..

Imagine what could be achieved if a few determined people actually put their minds to it! :rolleyes:

Anyone game to start a union that kicks @ss? :} Those AFAP and other assorted tw@ts that pass as unions in this country couldn't organise a p!ssup in a brewery :yuk: and seem more interested in navel-gazing than actually achieving anything.:ugh:

[mattyj]

how about making fees for the union 10% of your EBA award with no annual fees or deductions from wages..incentivise them:}

[Iamsosmrt]

"Choose a job you love, and you will never have to work a day in your life"

The problem with pilots is that many peaple choose the same job.
If you want to get paid for it too you need to alter the quote to say....

"Choose a job that only you love, and you will never have to work a day in your life, plus you might be able to make a living."

[The_Pharoah]

OR

"Choose a job you love, and you will never have to work a day in your life"

but have a 2nd job that actually supports you and your family whilst you do the job you love. :ok: eg. Woolies, dodgy internet-based pr0n site, etc etc.

Pharoah

[psycho joe]

The idea of standing together to improve everyone’s conditions and wanting to leave an industry in better shape than you found it is one that is learned through maturity and bitter experience.

The AFAP could do themselves and their constituents a massive service if only they would properly represent GA.


Why aren't AFAP reps visiting flying schools?


Why aren't AFAP reps seeking to educate fresh CPL's on their rights at work, how the industry works, potential pitfalls and why (for example) it's a bad idea to work for free? ( For a start there'd be a lot less "How can I get ahead whilst screwing everyone else" threads on PPrune. )


Why aren't AFAP reps visiting GA organizations to extol the virtues of what a cohesive group could achieve with union backing?


Quite a few moons ago now I worked for a large GA company that used dodgy management to harass young pilots into committing all sorts of dodgy acts. The AFAP response to my concerns ( I was the only union member in the company) was that they wouldn't act unless the majority of he workforce was unionized. I virtually begged for the feds to send a union rep so that we could hold a meeting, show the workforce that they would be represented and effect change. But no, it was not deemed to be in the AFAP's interest.

Fast forward several moons later and on getting my first airline job in Australia an AFAP rep was giving us the hard word on why I owed it to the AFAP to be a member. :mad:


I blame the complete lack of grass roots representation on why pilots learn to look after no-one but number one. :ugh: