Column: In anti-union campaign, Delta becomes latest firm offering dumb financial advice
The lineup of big businesses offering bogus and self-serving personal finance advice to the public seems to get ever longer.
But special attention should be paid to Delta Air Lines, which issued some outstandingly fat-headed suggestions in the context of an anti-union campaign, thereby creating a particularly noxious stew.
Delta is trying to fend off an organizing drive by the International Assn. of Machinists and Aerospace Workers aimed at 42,000 flight attendants, baggage handlers and other ground personnel. (Pilots already are represented by the Air Line Pilots Assn.)
As part of its “Don’t Risk It. Don’t Sign It” campaign to dissuade the workers from signing union cards, the company distributed fliers and posters advising them that the estimated $700 in dues they’d pay to the union could be better spent on “a new video game system with the latest hits.” Another flier advises that the $700 could “buy a few rounds” for “your buddies” while watching football.
In no other industrial nation do employers fight so hard to defeat, indeed quash, labor unions.
— Labor commentator Steven Greenhouse
The fliers drew some prompt pushback. Rep. Katie Porter (D-Irvine) called the campaign “a masterclass in corporate greed.” She pointed out that the company collected $800 million a year from the Republican tax cuts of 2017, “but you’re aggressively undermining unions, which fight for fair pay and job security for your employees.”
Delta defended its campaign with an emailed statement that its employees “want and deserve the facts and we respect our employees’ right to decide if a union is right for them. Delta has shared many communications, which on the whole make clear that deciding whether or not to unionize should not be taken lightly.”
One is accustomed to anti-union campaigns plumbing the depths of corporate cynicism. Delta’s campaign comes from the standard playbook. It asserts that unionization could place at risk pay and benefits the company has awarded to employees voluntarily, that contract negotiations can be difficult and time-consuming, and that union officers are well-paid.
The argument that dues money should be frittered away on trivialities is a novel element — and one that reverses the customary pattern of corporate personal finance advice. As we’ve reported in relation to recent efforts by JPMorgan Chase and the life insurance firm Ladder, these big companies normally counsel thrift.
JPMorgan, for instance, counseled customers to make coffee at home and eat leftovers, so they have more money to put in their bank accounts (including, presumably, at JPMorgan Chase). Ladder tried to dissuade people from eating out, getting haircuts and subscribing to cable so they’d be able to buy life insurance (including, presumably, from Ladder).
Delta turns this argument on its head by counseling workers to skip union dues so they’ll have more to fritter away. But let’s examine its economics.
To being with, according to the union, Delta flight attendants earn less on average ($58,341 in 2017) than their counterparts at United ($62,461), American ($62,366) or Southwest ($60,389).
Empirical evidence indicates that union members generally earn higher wages than their non-union colleagues. According to the Bureau of Labor Statistics, in the transportation and warehousing sector in 2018, the median wage of union members was 25.5% higher than non-union workers. The differential calculated by the pro-labor Economic Policy Institute, which takes age, education and other factors into account, is 13.6%.
The Bureau of Labor Statistics math pencils out to a median wage of $52,700 for a union member versus $42,000 for a non-union employee. That’s more than enough to cover union dues, with a healthy return left over. Even at the Economic Policy Institute’s calculation, the median differential would be nearly $6,000 a year. EPI further observes that union members are much more likely to be covered by employer-sponsored health insurance and retirement plans than their non-union counterparts.
For Delta flight attendants, the differential in wages alone would amount to another $15,000 by the BLS reckoning and nearly $8,000 by EPI’s. Even if a union contract were to bring the flight attendants up to parity with those at the other three airlines, the gain would be $2,000 to $4,000 a year.
Veteran labor reporter Steven Greenhouse writes in “Beaten Down, Worked Up,” his forthcoming book about the past and future of the American labor movement, that unions are responsible for most of the major improvements in American working conditions over the last century, including the 40-hour workweek, pensions and workplace safety.
Anti-union campaigns like Delta’s aim to consign this history to the oubliette, rather than treating unions as partners in efforts to increase productivity and revenue. “In no other industrial nation,” he writes, “do employers fight so hard to defeat, indeed quash, labor unions.”
Delta claims to be sedulously on the side of its workers: “The direct relationship we have with our employees is at the very core of our strong culture,” the company told me in its email. But the claim doesn’t hold water. It snarks about the pay of union leaders, but doesn’t mention that its CEO, Edward Bastian, collected $15 million in total compensation last year — more than 200 times the median rank-and-file pay. In the aftermath of the tax cuts, Delta said it would be funneling $2.5 billion to shareholders via share buybacks and dividends this year.
Delta’s scare campaign about the complexity of contract negotiating is another cynical ploy. The company says, for example, that pay raises and other workplace improvements are “typically frozen” during contract talks. But there’s no law mandating a freeze; it’s the company’s choice. As Greenhouse observes, contract talks often are prolonged and complicated because “some companies play vindictive hardball to make life tough for the union and convince workers they made a mistake in unionizing.”
So should Delta’s workers take the company’s advice about how to spend their money? Not if they can do the math.