In March of 2018, actress Jane Fonda, other celebrities and local politicians wrote to New York (NY) Governor Cuomo, demanding that the minimum wage for NY’s waiters and waitresses be raised so that the food servers would not have to rely on tips for pay. The progressive celebrities wrote, “Women deserve to earn a fair base wage so that the tips they still collect don’t come at a personal cost.” They felt that the food serving industry was unfair, discriminated against waitresses. In response, per the metro.us website: “‘Leave our tips alone!’ Waitresses reject Hollywood actresses’ plea to end tip credits”.
In May 2019, NY Representative (Rep), Alexandria Ocasio-Cortez proposed a minimum wage regulation forcing employers to ‘make up’ the difference of tips earned by – Servers and Bartenders. According to the NY Post, Rep. Ocasio-Cortez’s proposal met strong opposition from … Servers and Bartenders.
Why did these celebrities and politicians intervene in matters they did not understand? Were they being condescending or were they just uninformed? Ms. Fonda’s politics have been questionable since Hanoi, while Rep Ocasio-Cortez has a history of misreading her constituents’ needs, e.g., the Amazon debacle. How demonstrative that celebrities and politicians know so little about average Americans, that their causes du jour are so … wrong! Do entitled celebrities and politicians even know what minimum wage law (MWL) is or how it came about? Have these pampered folks ever earned a minimum wage?
According to Cornell Law’s website, “The national minimum wage was created by Congress under the Fair Labor Standards Act (FLSA) in 1938”. Eighty-three years ago, minimum wage began at $0.25 per hour; eighty-three years ago, America was coming out of the Depression. Was the minimum wage intended as a stepping-stone, a first rung on the ladder to earning better living wages, as some suggest? No, there is nothing to suggest that; the minimum wage may unintentionally promote good work ethics in people, but it was not designed that way. Others say that a fair minimum wage is a Constitutional right, that it will raise the lower class. No, the minimum wage is a law – not a right; there is a vast difference. And there is no proof the lower class will be ‘raised’ or ‘razed’.
What does Cornell Law say about the MWL’s origins? “The purpose of the minimum wage was to stabilize the post-depression economy and protect the workers in the labor force. The minimum wage was designed to create a minimum standard of living to protect the health and well-being of employees.” The point: eighty-three years ago, the minimum wage was never meant to become the norm; it was to serve during a crisis, a roadmap for successfully exiting the Depression. Do workers still need this outdated law? Who knows? No one will talk about it. What does this have to do with aviation? Everything.
In fast food restaurants, counterpersons rarely take orders; food requests are typed, then paid for on a touchscreen. Aviation, itself, has reduced manpower through the years, subtle processes that took decades to introduce. In 2001, some major airlines still did their own maintenance. Today, maintenance is farmed out to domestic contractors and/or repair stations located in low wage-paying countries. Remember when there were three pilots in the cockpit? Now every airliner has two; technology and research will reduce that to one pilot … or none. Subtle. How long before machinery completely replaces us? Consider: Except for extending flaps and lowering gear, what can pilots do that computers cannot? What avionics problems can a mechanic troubleshoot that the onboard computer cannot do better? Machines do not take coffee breaks, expect raises, call in sick, time out, demand medical or go on strike.
There are those in Congress who, not only feel the MWL is necessary, but are pushing to raise the federal average minimum wage of $7.25 per hour to $15.00 per hour – a 107% hike. Both sides of the aisle support this. Why? Are business owners so unscrupulous to deny worker raises if a hike truly profited the workforce? What facts – not feelings – support this argument? Consider this: Government shouts about the benefits of raising the minimum wage, but the costs get drowned out by thunderous applause. During the Depression, the MWL boosted the economy; it helped the workforce recover when the country needed such guidelines. Are there factual arguments for keeping the MWL as a law?
Aside from election talking points, does the MWL serve a Government purpose; does the MWL produce tax revenues? The Government can only tax companies, like a ‘Brand X’ Airlines (BXA), just so much. How, then, do they raise more tax revenue? By raising the minimum wage; by exploiting wage earners to generate more tax revenue. The more money BXA employees are paid, the more taxes the Government collects from BXA, like double-dipping. Cynically speaking, this would enable Government to subsidize more entitlement programs. Can this be demonstrated? As an example, consider the NY City (NYC) Triborough Bridge. In 1936, NYC instituted a temporary $0.25 bridge toll to pay for construction. The bridge was paid off years ago, yet the toll remains (now $9.50). Multiply that revenue by all NYC’s bridges and tunnels, the tolls – like taxes – are pure profit. Why, then, is NYC broke?
All can agree that the extra $7.75 per hour has to come from somewhere, but where? From Government? No, the money will come from companies, like our invented BXA. For instance, ramp employees with training, experience and/or seniority, make salaries that exceed the present minimum wage. These ramp employees, like gate agents or mechanics, have responsibilities and skills vital to BXA’s operation. Would these skilled employees see an equivalent pay raise of $7.75 per hour? There are no guarantees their pay would increase. In the end, BXA’s gate agents, mechanics, pilots and even management would see their hard-earned pay differentials decrease, their pay step grades flatten. If BXA did compensate, the money would have to be redirected from elsewhere. Skilled and/or senior employees would helplessly watch their cost-of-living raises dwindle, medical benefits reduced, promotion opportunities vanish and overtime cut. The good news is that elected officials in Congress will keep their pay and perks; celebrities will still make movies. But workers with years of job security in a failing company, will hit the Welfare Lines. Incidentally, isn’t Welfare another government program that outlived its original purpose?
Why? Because Government cannot force employers to compensate skilled or senior worker salaries equal to the new minimum wage hike. Unions might negotiate salary increases, but success is never certain and would take time. Consider this: the first two things to suffer during an airline’s financial crisis are Training and Maintenance. Those are huge consequences.
If BXA continues to fly, how could they save the $7.75 per hour? Some operators closed their doors during the COVID crisis. The ones that survive a minimum wage hike will outsource maintenance to repair stations in other countries, whose leaders refuse to pay a $15.00 per hour minimum wage; more American jobs going to foreign countries. The flying public’s safety could be at risk; these foreign workers’ work quality may be in question, their skills, unknown. Communities that rely on domestic certificate holders could suffer financially. Closings or mergers, like Hawkins and Powers (Greybull, WY), Northwest Airlines (Memphis, TN), Eastern Airlines (Miami, FL), etc. impacted communities.
What about skilled workers? After Air Midwest 5481, much was learned about how worker quality was tied to pay. Cut hours did not guarantee quality. Skilled workers sought higher paying jobs; mechanics, who, for years, built up seniority and experience, looked for jobs in other industries, like elevator or auto repair. Air Midwest was left with unskilled workers who lasted days, not years. New hires left with their new training; quality dropped; complacency threatened passenger safety; planes were flown unsafely.
Such is the effect of financial instability. Experienced pilots will look elsewhere, decreasing the qualified workforce. Employees raising families will double-up on their work, resulting in more hours worked, less hours resting. One domino strikes the next domino in line until all are knocked over.
Aside from salaries, what other consequences are there for certificate holders rocked by financial stress? As go salaries, so go the quality of benefits – they are usually a package deal. Hospitalization, well visits, prescription copays and paid dental visits will suffer. When employee benefits are reduced, out-of-pocket expenses go up. Home repairs, children’s education, etc. still exist. Food, gas, and utility costs will, directly or indirectly, be affected by across-the-board, across-the-country minimum wage increases.
But what if the minimum wage law was overturned? If no one has conducted a factual argument against/for a minimum wage, this would be the time to have that discussion. Is the MWL hurting wage earners? Businesses? The American economy? What if employees entering a particular field that requires training and security checks, encouraged companies to raise employee pay rather than surrendering their trained employees to their competitors? Would that inspire employees to better their skills, to rise above minimum wage, become irreplaceable, attain higher pay in their present position?
Out of curiosity, why $15.00 per hour; where did that number come from? $1.00 or $1.50 minimum wage increase would be a sensible, doable raise, but an increase of 107%? Who does that benefit … and why? Do the Jane Fonda’s and Rep Ocasio-Cortez’s ideals represent American workers? These questions should be asked. What about the outdated MWL? None of what was discussed in this article was made up; it was based on history. It is very possible. You don’t believe a word said here? Good, then let us have that discussion.