Flying Lower on Airline Paychecks
The phone line in Dave Meyers’ third-floor walk-up has been turned off to save cash, and the brown velour sofas, bought secondhand, are bare in a few spots. Still, the modest apartment is about what you’d expect for a single guy who spends most of what he earns.
The problem for Meyers -- a United Airlines ramp worker whose pay has been cut twice in the last two years -- is that he consistently spends more. Child support is nearly $700 a month, deducted from his paycheck. Of the remaining $1,600 in take-home pay, rent claims another $700, and is unpaid although it’s the 11th of the month. His checking account is overdrawn.
The financial juggling has Meyers fuming. This is not what he expected when he went to work at United 7 1/2 years ago, trading the headaches of running his own contracting business for the security of working for someone else. The rules were clear, he said, feverishly paging through an old union contract for the language to prove it.
That contract, however, was written for a company, UAL Corp., and an industry very different from the one workers find themselves in today. It is a reality that Meyers and many others -- demoralized by pay and benefit cuts -- remain reluctant to accept.
“Everything keeps going up, man,” Meyers said. “And we’re just going backwards.”
The airline industry -- battered by record fuel prices, low-cost competition, the lingering effects of the Sept. 11 attacks and other problems -- is squeezing workers long accustomed to generous union-negotiated pay, robust pensions and enviable job security.
Analysts say the workers have no choice but to adjust. They note that industries from steel to telecommunications are also cutting benefits, a trend that is likely to continue.
“I do not think this is the last time an American industry will go through this kind of upheaval,” said Darryl Jenkins, a professor of airline management at Embry Riddle Aeronautical University in Daytona Beach, Fla. “This world is very much changing and unstable, and in those kinds of circumstances, this kind of change is inevitable.”
Airline workers tell similar stories of their start in the business, and the romance and prestige and financial rewards that came with the job. But that was before the industry launched into a maelstrom of cost cutting.
Most of those cuts have been directed at the labor costs that now account for nearly a third of airlines’ operating costs. In January, United baggage handlers, ramp workers and others took on a temporary 11.5% pay cut. That is on top of an 18% cut two years ago. At USAirways Group Inc., flight attendants agreed to pay cuts of about 9% late last year, their third cut in 30 months.
The average US Airways flight attendant now makes about $34,000 a year, compared with $45,000 to $52,000 a few years ago, union officials say.
Some airline employees, such as lead ramp workers at United, still earn close to $20 an hour after the cuts -- more than $41,000 a year before overtime pay -- and acknowledge they’d be hard-pressed to find a comparable job in the current economy.
Compensation for the next generation of workers is unlikely to approach that. When US Airways held a job fair this month outside Philadelphia to sign up new ramp workers, it was offering pay of $9.59 an hour.
The cuts are a painful side effect of efforts by established carriers, known in the industry as legacy airlines, to make themselves more like JetBlue Airways Corp. and other low-cost upstarts, industry analysts say.
“US Air takes someone who was making $20 an hour and pays them $12 an hour, which might even be more than JetBlue, and that person remembers, being human, that they used to make $20,” said Michael E. Levine, a former top executive at three airlines and now a law professor at Yale University.
“It’s one of the challenges of the legacy network airlines,” he said. “They start with a labor force that has grown used to and felt entitled to work on terms that customers simply won’t support.”
But workers, many who have logged years with the airlines and intended to stay until retirement, say they can’t just ditch the mortgages, tuition bills and other expenses based on yesterday’s paychecks.
Consider the monthly budgeting worries of Eileen Zolinas, a 16-year flight attendant for US Airways whose husband, a mechanic for the airline, died in 1993.
Without enough seniority, Zolinas flies “on reserve” -- airline-speak for whenever she’s called -- and gets paid for 71 hours of flight time monthly, though she usually flies less. She figures that she needs to work at least 95 hours a month to pay the bills.
The limited hours and lower hourly wages have pared her annual earnings from about $40,000 a few years ago to about $31,000 last year. With the newest pay cut, she expects them to drop to about $26,000.
“I can’t afford to get part-time work because I’m on reserve and I never can tell when I’m going to get called,” said Zolinas, of McKees Rocks, Pa., just outside Pittsburgh. “I’m on pins and needles here. I don’t know where to go or what to do.”
For years, Zolinas and her children, now 21 and 23, were covered without cost under her deceased husband’s medical benefits. When the airline stopped providing those, Zolinas enrolled in the company plan on her own, but that costs about $200 a month.
Her son left Pennsylvania State University and moved back home to enroll at the University of Pittsburgh because he couldn’t afford to pay for housing and she couldn’t afford to help.
Zolinas says the stress leaves her with a frequently upset stomach, but she avoids going to the doctor to save the $25 co-payment. She is considering whether to relocate to Philadelphia, where the airline is directing more of its flights, or to try another line of work, but is reluctant to leave her hometown and her children.
“I can’t go on this way much longer,” she said.
For Meyers, the United ramp worker, the new airline economics is more about losing the chance for bigger paychecks that were just around the corner.
Meyers says he was making about $60,000 a year in the mid-1990s running his own business. But the headaches of managing people were getting to him. So he followed his cousin’s lead in 1998 and applied for a job with the airline.
He started at $8.98 an hour. But the contract spelled out frequent raises, the promise of a healthy pension, generous health insurance for his family and, after five years, a jump to a higher wage scale promising pay nearly as good as he had doing contracting.
He reached that point in 2003, when his pay nearly doubled from $13.51 an hour to $25.06 an hour, equal to roughly $52,000 before overtime. It lasted for one paycheck.
In a new contract agreed to by the union, Meyers saw his hourly pay slide to $20.66 an hour -- about $43,000 a year. Last month workers saw their pay pared again, leaving Meyers at $18.41 an hour -- about $38,000.
Meyers, with his access to low-cost air travel, can still justify a recent trip to Tampa, Fla., with his buddies for a few days of golf. But he also has to explain to his children that he can’t afford to take them out for fast food, because it’s cheaper to eat at home.
It’s a constant balancing act, with few alternatives, said Meyers, one of about 20 union stewards who work on the tarmac at United’s O’Hare International Airport hub.
Meyers said it was too late to rebuild his contracting business -- he’d have to start from scratch. With nearly eight years at United, the 40-year-old worker sees himself approaching the halfway point to retirement and is reluctant to loosen his grasp on that future pension. And he can’t afford to leave a job that provides health insurance for his children.
“If I would’ve known it was going to be this way, I would have never given up my company,” he said.
Airlines acknowledge that the cuts are difficult for workers, but say they are a necessary sacrifice to keep companies afloat -- and the workers’ jobs intact.
“We had a choice to make: be competitive or not. The only way to be competitive is to have a competitive cost structure,” said Dave Castelveter, a spokesman for US Airways.
“We know this is difficult. All the work we’ve been doing is difficult, but it’s necessary,” said Jean Medina, a United spokeswoman. “We do think there’s a new reality.”
But with the parameters of that new reality in flux, workers are uncertain about what comes next.
Half an hour after his shift ends, Craig Krzewina hunches over a Coke in a sports bar a few miles from O’Hare, a high-stakes poker match flickering on a screen overhead. Krzewina barely notices, caught up instead in reexamining his own gamble.
At 19, Krzewina dropped out of college and took a job washing dishes in the cafeteria at United headquarters, seeing it as a route to a better job. By the mid-1990s, he was making good money and, thanks to an employee stock ownership plan, had accumulated a nest egg of shares worth about $125,000.
Now, 27 years after he joined the airline, Krzewina’s liquidated that account after its value plummeted, settling for about $5,000. He’s making $19.73 an hour, a wage he admits he’d be thrilled with if he were out looking for work. Except that puts him back at roughly what he was making fully 11 years ago. With the first of his two children moving on to college next year, his career is stuck on pause.
“Back then when you started, pretty much everyone was a lifer because it was a good job,” he said. “But this isn’t the job it was. And you see it now.”