Summary: Our major media tell the news from the perspective of the 1%, no matter how bogus. For example, in stories about “skills shortages” we see the New America in which employers refuse to pay market-based salaries. They assume that the reserve army of the unemployed — refreshed by immigration — will keep wages down. So they play a game of chicken with workers, assuming that the game is stacked in their favor. Here we look at this contest in the market for commercial airline pilots, one of increasingly common stories about “skills shortages.”
This article in Forbes nicely shows the modern CEO’s view of the world (that’s what Forbes does).
“Pilot Shortage Threatens To Slow U.S. Airline Growth”
by Brian Prentice and Philippe Gouel, 28 Jan 2016
“Unless airlines find ways to work with partners to cultivate a pilot pipeline, they could face difficult, even volatile, competition for experienced pilots because the current regulatory and industry situation can only yield about two-thirds of the pilots the U.S. will need in the next 20 years. … Leading airline executives are considering a new approach to the problem by forming partnerships with operators, training providers, and even regulators to shape the pipeline of pilots in training.”
“Leading airline executives” have more sophisticated tools than microeconomics 101. They do not see a pilot shortage as market signaling that they do not pay pilots enough to produce the needed supply. They have “new approaches.”
Tanya Powley at the Financial Times explains some causes in “Shortage of trained pilots could keep jets on the ground” , 9 March 2016 — “Challenge of keeping the cockpit staffed as passenger demand for flights surges.”
“It’s all I’ve wanted to do since I was about 11 but it’s not without its challenges,” says Mr. Audlin… “You’ve got the stress of pilot training, which is incredibly intense, coupled with financial stress.” … The cost of training is substantial: it can exceed £100,000 for those who undertake a full-time 18-month course. If they go on to train on a specific aircraft, such as the Boeing 747 or Airbus A320, they have to find another £30,000.
Twenty years ago, airlines mostly paid for training, or pilots would join from the military. However, as cuts have been made across an industry that often struggles to be profitable, the financial burden has gradually shifted to the trainee, and most have to cover the cost with bank or family loans.
That sounds like quite a challenge. But like the Forbes article, she doesn’t mention wages. The journalists at The Economist explain modern capitalism’s problem-solving methods: “America is running out of people to fly its planes“, 9 March 2016.
A low-salary, high-barrier-to-entry job is hardly an attractive prospect for people thinking about starting a career in aviation — and with regionals operating nearly half the country’s flights, some flyers’ working lives begin and end at these lowly carriers. … But the Regional Airline Association is trying to boost its recruitment efforts by pitching aviation careers to high school and college students. With luck, the wisdom of the markets should prevail: fewer candidates means salaries will eventually have to rise, and more people will enter the field.
Modern business relies on “luck” and the “wisdom of the markets. That’s logical, because neither of those wants a paycheck. Unlike actual people.
Why the shortage?
While journalists get their information from corporations, a little digging reveals other reasons for the pilot shortage. Irregular hours, often long shifts — and it’s the third most dangerous US occupation in terms of fatalities (higher in the low-paid ranks of pilots). There is also a higher than average rate of injuries and illness, including a rate of melanoma 2.2x the average.
For a clearer perspective see “Fact and Fallacy of the ‘Pilot Shortage’” by Patrick Smith at his website, Ask the Pilot.
The major carriers will always have a surplus of highly qualified candidates to choose from. They are able to cull from the top ranks of the regionals, as well as from the military. The impending wave of retirements won’t come close to depleting a steady supply of experienced crews.
At the regionals it’s a different story.
How it came to this is both a long and short story. The short story is that pay at the regionals is terrible and working conditions are harsh. Keep in mind that becoming a licensed pilot in the first place, to the point where one is eligible to apply for an airline job — any airline job — is a long and very expensive endeavor. It can take years, and tens of thousands of dollars. Salaries at the regionals, meanwhile, begin as low as $20,000 dollars a year, and top out at under six figures. Schedules are demanding and benefits paltry; the relationship between management and the workers is often hostile. On top of all that, the regional side industry is highly unstable. Carriers come and go in waves of mergers, acquisitions and bankruptcies.
But this is nothing new. Pay and working conditions at these companies have always been substandard, and filling jobs has seldom been a problem. What’s different is that the regional sector has grown so much. It used to be very small, and pilots saw these jobs as a temporary inconvenience — paying one’s dues. It was a stepping stone toward a more lucrative position with a major. Today, regional jets account for an astonishing one half (53% was the last number I saw) of all domestic departures in the United States. Pilots have figured out that a job at a regional could easily mean an entire career at a regional. Thus, a diminishing number of pilots have been willing to commit the time and money to their education and training when the return on investment is at best unpredictable.
The growth of the regionals is a form of outsourcing by the big airlines. Republic Airways filed bankruptcy; they few flights under the names Delta Connection, United Express, and American Eagle. Like other worker intermediaries in our new economy (e.g., temp agencies, contractors) they are trapped between their big customers — who squeeze every possible dime from them — and their workers to whom they pass on the pressure.
Why the surge of articles about this “problem”?
The airlines want safety regulations rolled back, especially the tough new regulations passed by Congress in 2013. Here’s a typical example of industry propaganda in Travel Weekly. Either compromise safety or have fewer flights! Paying workers more is not an option. The Air Lines Pilots Assn has a through debunking of this campaign.
For More Information
If you liked this post, like us on Facebook and follow us on Twitter. See all posts about the new jobs market, and especially these…
- Do we have a shortage of workers, or just cheap employers? Part one.
- Do we have a shortage of workers, or just cheap employers? Part two.
- The shortage of STEM workers: another bogus crisis crafted to benefit the 1%.
- Connect the dots to see why wages aren’t growing for most Americans.
The Solution
Flight crews had five in the cockpit of commercial airliners. Now there are only two (e.g., flight engineers were eliminated in the 1960s). Eventually they’ll be only one the pilot — doing mostly administrative work and decision-making.
