Philadelphia airport has passed a $12 minimum wage. The previous minimum was the state’s $7.25 per hour.
And that’s not all. The wage provision also covers employees of all the airlines’ vendor companies — a population that has been hard to reach, as the industry has contracted out basic services, a shift that has helped depress wages for airport workers through the 2000s. And it includes a provision requiring airport employers to remain neutral in any union drives, which should help the group pushing hardest for the changes — the Service Employees International Union — finally organize the airport’s contracted workforce.
…And it’s just one of a string of victories pushed by a couple big unions that have leveraged public control of airports to win concessions from airlines that have proven difficult to achieve in purely private sector industries.
San Francisco, Los Angeles, and Seattle airports have moved in similar directions. Minneapolis requires paid sick leave.
It’s no coincidence that airports are at the vanguard of pushing for higher minimum wage laws. An airport is a huge capital investment that cannot easily be moved, and demand for services at the airport like wheel chair assistance is pretty inelastic.
For Philadelphia’s airport, its biggest customer is American Airlines. And for American the major competitive option is New York JFK, which is already an expensive place to operate. So Philadelphia can probably do this.
The airport extracts higher costs, and has chosen to do this in the form of higher wages for workers. They could have done it in the form of higher rents, or terminal improvements funded by airline tenants. US airports are politically-controlled, so their priorities can be politically set. And unions have made wages a priorities for the political decision-makers at airports.
Labor union UNITE-HERE even has a role to play in Greece, as the government contemplates reforms (such as privatizing airports and other tourism-related businesses to raise cash) versus possible exit from the Euro.
[UNITED-HERE] is now pushing the concessions operator, the German company Fraport, to recognize the union [at BWI] — but so far, Fraport hasn’t been open to talking. He’s even talked to lawmakers in Greece, which is considering contracting with Fraport to run its national airports, to tell them about the labor strife still ongoing in Baltimore in hopes of pressuring the company to come to the table.
I’ve been through extensive processes in Arlington, Virginia where the County extracts concessions from developers and prioritizes how it seeks to use those concessions. They’re more or less a line item on a project’s costs, and whichever priority is in political favor gets it. This process is less transparent than if it were all done as a cash payment and an appropriation.
There’s some price above which the airport is no longer cost competitive and tenants get pushed elsewhere. The low cost carriers left Miami for Fort Lauderdale because construction costs pushed landing fees too high. That ironically made the airport more attractive for American, becuase the higher costs meant less competition and greater pricing power. Fort Lauderdale isn’t a perfect substitute, even if jetBlue can support Port-au-Prince operations there.
Of course, American just asks that they don’t get singled out with wage increases.
“We’re fully supportive of wage increases, and we’re always working with our vendors to make sure they’re paying fair wages,” says American Airlines spokesperson Casey Norton. But when the community is better paid, it makes it easier, rather than just isolating it on one particular work group or industry, as far as purchasing power.”
The combination of political decision-making with geographic monopoly and large, immovable investment make airports one of the most strategic places for focus minimum wage campaigns. It’s a brilliant tactic at least in relatively blue states.