Southwest Considring Employee Buyouts

[N305AS]

What I mean is employees with the SAME ability or talent should make the same amount of money.

With increasing seniority, experience increases and the employee should be paid more. What is irrational is for a 15 year employee to make three times that of a new hire and for a 30 year employee to make exactly the same as a 15 year employee. The differences need to be less stark and not jarringly end at the 15 year mark.

Does a 15 or 20 or 30 year flight attendant, gate agent, etc., do a better job than a new hire? Of course. Do they do a job that's three times better? I don't think that's possible.

Wow JS - that certainly seems fair!

The reason there is such a disparity in pay between new employees and very senior, topped-out employees is that WN creates the pay scale that way intentionally to save money.

All pay scales have a low starting end, with small, gradual increases over a long period of time. The higher pay increases are backended to the very end of the pay scale so that the company only has to pay a very small percentage of employees those top rates.

WN banks on high rates of attrition. The majority of their workforce is in the early to middle stages of that pay scale, and few see the end of it where the $24.00/hr pay rate hits.

The company cannot arbitrarily terminate someone who has topped-out on the payscale though. Part of the collective bargaining agreement that WN signed off on stipulates that furloughs are done in reverse seniority order, with the lowest seniority people being let go first.

So to realize the savings of axing one topped-out agent, you'd have to let at least two newhires go.

Since this decreases productivity, there's very little sense in furloughing anyone except as a last resort.

 

[JS]

Removing the spin, that would read as follows:

The reason there is such a disparity in pay between new employees and very senior, topped-out employees is that the union demanded the pay scale that way intentionally to suck people into paying union dues.

Unionized pay scales have a low starting end, with small, gradual increases over a long period of time. The higher pay increases are backended to the very end of the pay scale so that the company only has to pay a very small percentage of employees those top rates which ends up being a large portion of employees as the company matures (e.g., all of them at USAirways).

WN banks on high rates of attrition. The majority of their workforce is in the early to middle stages of that pay scale, and few see the end of it where the $24.00/hr pay rate hits.

The company cannot arbitrarily terminate someone who has topped-out on the payscale though per the collective bargaining agreement. Part of the collective bargaining agreement that WN was forced to sign stipulates that furloughs are done in reverse seniority order, with the lowest seniority people being let go first because this maintains the "need" for dues-paying union members.

So to realize the savings of axing one topped-out agent, you'd have to let at least two newhires go which makes no business sense, naturally.

Since this decreases productivity which is quite common when it comes to unionized labor, there's very little sense in furloughing anyone except as a last resort which is evidence that unions exist solely to maintain employment for people who have no business being there.

 

[Fubijaakr]

Well, JS, from you "perspective" I'd venture to guess you are either:

1. In a dead end, low paying job with no prospects for advancement, or
2. A wannabe who couldn't get hired and are green-eyed with envy.

So, which is it? There is no third option.

 

[JS]

What do you mean, there is no third option? How absurd.

I make a nice living in a non-union environment. I don't have any subordinates because I am not interesting in being a manager (did that before, didn't like it).

 

[insp89]

I didn't suggest firing old employees just because they're old. I am suggesting firing EXPENSIVE employees. If the expensive employees are old, so be it. The employee should be offered the opportunity to take a pay cut and make what everyone else is making. Same age, yet no longer expensive. How about that.

As for me, I am not worried one bit about being replaced by a younger employee in the future. All the people who have been laid off in the last few years were laid off because their jobs ceased to exist and they were unable to adapt.

People like YOU are one of the many reasons why unions exist !!!!!

 

[mweiss]

And people like you are one of the reasons unions are going extinct. So where does that ultimately leave us, eh? :huh:

 

[Diesel8]

JS,

The problem with your argument, is that there may be a race to the bottom.

If every time, someone is capable and willing to do the job for less, the employer would simply fire the higher paid and take on the next one. Then before long, we get into "McDonald" territory.

Someone making minimun wage, will see a job paying minimun wage plus 25 cents as being a good deal.

Obviously, from an employee point of view, this is bad and unions exist, amongst other reason, because in times past, those were practices used. An employee, doing a great job, should not be easily replaceable, if the only reason is the wage that was negotiated is now considered too high, unless of course, it is through collective bargaining.

I am sure, you would be upset, if you were let go, not because you did not do a great job or were skilled, but because you were too old or the company found someone to do your job for less. Unless you had skills that were very specialized, and therefor indispensable, it could become a revolving door.

Is this a perfect sytem, far from it, but it does offer the employee a bit more stability.

 

[swflyer]

For The Record, and actually on topic:

This rumor has been brought up on our f/a forum, only to be debunked by folks at the Union office:

This rumor has been floating around from some time now. The Union has communicated with Local 555(Ramp,OPS,Prov), IAM(CSA & Res), and SAEA(Dispatchers), and to date, no work group including our own has been offered an early retirement package.

Not an unimpeachable source, based on the previous posts, but I'm not interested in a dialogue on the source.

Thankyouverymuch

 

[JS]

JS,

The problem with your argument, is that there may be a race to the bottom.

If every time, someone is capable and willing to do the job for less, the employer would simply fire the higher paid and take on the next one. Then before long, we get into "McDonald" territory.

Someone making minimun wage, will see a job paying minimun wage plus 25 cents as being a good deal.

Obviously, from an employee point of view, this is bad and unions exist, amongst other reason, because in times past, those were practices used. An employee, doing a great job, should not be easily replaceable, if the only reason is the wage that was negotiated is now considered too high, unless of course, it is through collective bargaining.

I am sure, you would be upset, if you were let go, not because you did not do a great job or were skilled, but because you were too old or the company found someone to do your job for less. Unless you had skills that were very specialized, and therefor indispensable, it could become a revolving door.

Is this a perfect sytem, far from it, but it does offer the employee a bit more stability.

You're forgetting one thing. Generally speaking, you get what you pay for.

Businesses aren't interested in replacing $15/hour employees with $6/hour employees if the $15 people are doing a job that cannot be done by the $6 people.

The labor market can work just as efficiently as any other market if you get the government and other artificial impediments, such as unions, out of the way. Efficient markets benefit everyone.

The practices used in times past are not aspects of an efficient labor market. An efficient labor market requires a large number of independent employers (analogous to a large number of independent buyers visiting the Ford lots and the Honda lots).

In the Industrial Age, you had very few employers operating factories, and it was either work 100 hours a week in terrible conditions for 25 cents an hour or starve to death. This situation simply does not exist any more, not to mention the enactment of federal labor laws that satisfied all the demands of the original unions and then some.

 

[insp89]

=mweiss,May 25 2004, 03:14 AM] And people like you are one of the reasons unions are going extinct. So where does that ultimately leave us, eh? :huh: [/QUOTE]
Ah, my intellegent friend weiss and his 2 cents worth....I would'nt count on labor unions going "extinct" any time soon. It's no doubt labor unions are under attack by the sleazy "big business" tactics of the growing global marketplace. But have no fear, As long as there are "corporate crooks" and "blue blood" attitudes looking to squeeze another penny from the people that actually do the work, Labor unions will be in demand.. Just remember, when a union is able to organize a group of employees, It is due to that particular company refusing to work with employees in a non-union enviroment... [I guess some corporations need a 2x4 up side their head to do right by employees]...Where does that leave us , eh?? Business as usual.

 

[mweiss]

That works well when the union has solid control over the labor pool. The reduction in transportation costs has slowly been eroding this control, making it harder for unions to continue to provide the service they once did. It's quite difficult, for instance, for one to compete against Chinese prison labor camps.

I'm not suggesting that this turn of events is a good thing by any stretch of the imagination. I'm just saying that this is what has happened in the past quarter century.

 

[txskygal]

Well, the "unofficial" official word is that the Q and A details of this will be released tomorrow in "MySwa.com". It will be quite interesting to see how it is played out; and what is offered to the different employee groups, and to which.

 

[swflyer]

Official word, no details until later, this morning. I was also news to me that this will be "another early retirement program".

A Note from Colleen and Jim Posted on Thu, 05/27/04 00:00:

The number-one question we have fielded from Employees across our system over the last six months has been, “When is Southwest going to have another early retirement program?†Well, here it is. We are pleased to announce a one-time offer called Freedom ’04 that will be available for a limited time.

The Freedom ’04 program is completely voluntary, and is available to any Employee who has completed at least one year of employment. Participants will have three benefit packages to choose from, which vary in monetary compensation and health benefits. The total compensation and benefits under all three packages increase based on your total years of service. All packages include pass privileges for you and your immediate dependents, if you have completed at least two years of service.

Complete details on Freedom ’04 will be available before noon today on SWALife. (Select the “Benefits†tab at the top of the page, then choose “Freedom ’04†from the options appearing on the left of the screen. Please see the column at right for login help.)

The voluntary resignation forms must be signed and returned to Vice President People Beverly Carmichael no later than June 25. For those who have been contemplating retirement, this offer is an added bonus. For others, it may allow you to pursue another lifetime dream. Remember, this is not an ongoing program, so carefully study all information pertaining to the offer and make your decision by June 25.

 

[Cfm56]

>>>>>The number-one question we have fielded from Employees across our system over the last six months has been, “When is Southwest going to have another early retirement program?â€￾ <<<<

Who writes this stuff? Who thinks this has really been the #1 question asked by employees?

Anyway, obviously this is a program aimed primarily at higher seniority employees (i.e. higher paid) and is a way of off-setting the recent slower growth. Peviously strong steady growth had allowed for more junior people and lower average pay rates. This is a smart move for SWA. No one has to take it but some will.

 

[txskygal]

>>>>>The number-one question we have fielded from Employees across our system over the last six months has been, “When is Southwest going to have another early retirement program?â€￾ <<<<

Who writes this stuff? Who thinks this has really been the #1 question asked by employees?

Anyway, obviously this is a program aimed primarily at higher seniority employees (i.e. higher paid) and is a way of off-setting the recent slower growth. Peviously strong steady growth had allowed for more junior people and lower average pay rates. This is a smart move for SWA. No one has to take it but some will.


Does anyone know if there has every been another early retirement program? Not an "I'm closing your station/center; so now you'll need to transfer or retire/quit/make other arrangements for this" program? I really don't know of any; do y'all?

Thanks in advance.