American Airlines Fights To Halt Worker Pay Raises, Even As CEO Pockets Millions

By MARC MCDONALD

Workers at American Airlines agreed to wage and benefit cuts worth $1.6 billion when the company was on the verge of bankruptcy a few years ago. Thanks to the workers' sacrifice, American Airlines is profitable again.

Now, instead of rewarding its employees, American Airlines wants to halt worker pay raises.

However, there's one group of American Airlines employees who aren't being asked to share in the pain: the executives. Over the past couple of years, American Airlines gave stock bonuses worth $250 million to the company's executives and managers.

So much for "shared sacrifice."

American Airlines' CEO Gerard Arpey did particularly well last year. Arpey pocketed a $581,534 salary last year, along with $39,769 in other compensation. But that was chump change, compared with the $4.8 million in stock and option awards that Arpey received last year. And in April 2007, he pocketed a bonus of $6.6 million.

The American Airlines saga is just another chapter in the skyrocketing inequality that has taken place in America since Ronald Reagan declared war on labor unions in the 1980s. Indeed, the American labor movement never really recovered from Reagan's firing of 11,345 striking air traffic controllers in 1981.

Reagan, a former union man himself, stabbed the workers of the Professional Air Traffic Controllers Organization in the back. But worse than that, he gave a green light to corporate America to bust unions, ignore labor laws, and screw workers---a process that continues to this day.

As a result, America has been increasingly economically polarized since 1980s. The middle class is shrinking and inequality is at its highest level since the Robber Baron era of the late 1800s.

CEO salaries tell the story. In 1980s, the CEOs of Fortune companies earned about 42 times as much as the average worker. By 2000, CEOs were making over 500 times what the average worker earned. In 2004, the average CEO of a major corporation received over $9.8 million in total compensation.

This economic gulf is unique to America, by the way. In Japan, for example, CEOs only make around 17 times what the average worker earns. In Continental Europe, the multiple is around 22.

But if a U.S. CEO making more than 500 times what the average worker earns sounds like a wide gulf to you, it's nothing compared to what one sees in the airline business these days.

For example, United Airlines executive Glenn Tilton makes 1,000 times what a United flight attendant at the top of the scale earns. Tilton's total compensation in 2006 was estimated at $39 million. By contrast, United flight attendants earn an average salary of about $31,000.

No doubt, I will soon be hearing from this blog's NeoCon visitors, who will start lecturing me about how CEO pay is all part of the "free market." No doubt, they'll lecture me about how "liberals just don't understand capitalism."

Well, they're entitled to their viewpoints. But I wonder where these Republican-voting "capitalists" were in 2001, when the Republicans and the Bush White House bailed out the airline industry with $15 billion of taxpayer money (including a cash gift of $5 billion). If Bush supporters think this is "capitalism," they need to go back and re-read Adam Smith.

Crossposted at BeggarsCanBeChoosers.com