Review the case scenario illustrated below and answer the following questions:
Question 1: What does the current outlook and wage data suggest regarding the wage rate in the pilot profession? Do you predict this profession to expand or contract in the future?
Question 2: Should the United States pass a minimum wage that assures all workers earn a wage above the poverty level?
Question 3: How can Unions enhance productivity?
Case Scenario:
Market:
The passenger airline industry is undergoing many changes, with some airlines posting increases in passenger traffic and adding routes while others are cutting back. Overall, the employment of aircraft pilots is projected to increase about as fast as average for all occupations through 2014. In the long run, demand for air travel is expected to grow along with the population and the economy. In the short run, however, employment of pilots is generally sensitive to cyclical swings in the economy. During recessions, when a decline in the demand for air travel forces airlines to curtail the number of flights, airlines may temporarily furlough some pilots.
After September 11, 2001, air travel was severely depressed. A number of the major airlines were forced to reduce schedules, lay off pilots, and even declare bankruptcy. At the same time, hiring continued at regional and low-fare airlines. Job opportunities are expected to continue to be better with the regional airlines and low-fare carriers, which are growing faster than the more well-known major airlines. Opportunities with air cargo carriers also should arise because of increasing security requirements for shipping freight on passenger airlines and growth in electronic commerce. Business and corporate travel also should provide some new jobs for pilots.
Pilots attempting to get jobs at the major airlines will face strong competition, as those firms tend to attract many more applicants than they have jobs. They also will have to compete with laid-off pilots for any available jobs. Pilots who have logged the greatest number of flying hours using sophisticated equipment typically have the best prospects. For this reason, military pilots often have an advantage over other applicants. However, prior to September 11, 2001, some airlines reported a shortage of qualified pilots to operate the most sophisticated aircraft. Thus, when hiring improves, jobseekers with the most FAA licenses will have a competitive advantage.
Fewer flight engineers will be needed as new planes requiring only two pilots replace older planes that required flight engineers. Pilots also will experience some productivity improvements as airlines switch to larger planes and adopt the low-fare carrier model that emphasizes faster turnaround times for flights, keeping more pilots in the air rather than waiting on the ground.
Earnings:
Earnings of aircraft pilots and flight engineers vary greatly depending whether they work as airline or commercial pilots. Earnings of airline pilots are among the highest in the Nation, and depend on factors such as the type, size, and maximum speed of the plane and the number of hours and miles flown. For example, pilots who fly jet aircraft usually earn higher salaries than do pilots who fly turboprops. Airline pilots and flight engineers may earn extra pay for night and international flights. In May 2004, median annual earnings of airline pilots, copilots, and flight engineers were $129,250.
Median annual earnings of commercial pilots were $53,870 in May 2004. The middle 50 percent earned between $37,170 and $79,390. The lowest 10 percent earned less than $26,300, and the highest 10 percent earned more than $110,070.
Airline pilots usually are eligible for life and health insurance plans. They also receive retirement benefits and, if they fail the FAA physical examination at some point in their careers, they get disability payments. In addition, pilots receive an expense allowance, or “per diem,” for every hour they are away from home. Some airlines also provide allowances to pilots for purchasing and cleaning their uniforms. As an additional benefit, pilots and their immediate families usually are entitled to free or reduced-fare transportation on their own and other airlines.
More than half of all aircraft pilots are members of unions. Most of the pilots who fly for the major airlines are members of the Airline Pilots Association, International, but those employed by one major airline are members of the Allied Pilots Association. Some flight engineers are members of the Flight Engineers’ International Association.
Information taken from the U.S. Department of Labor website.