At the heart of the debate over whether to extend payroll support for U.S. airlines is a fundamental question: are airline workers essential workers?
World’s Most Powerful Flight Attendants Calls Airline Employees “Essential” Workers
Sara Nelson, President of the Association of Flight Attendants, was asked to defend another round of airline bailouts on CNBC’s Squawk Box. Host Andrew Ross Sorkin begins by noting the reasons in-favor of another round of payroll support for U.S. airlines, but then asks, “What I don’t understand is why the taxpayers should be subsidizing the shareholders of these airlines in any way whatsoever.”
Nelson first begins by arguing that the support is for workers and directly supports taxpayers:
“Let’s be clear…This is a payroll pass through. It’s 100% returned to the taxpayers because you have people continuing to pay into the system, contribute to the economy, and we keep service to all of our communities.”
She goes on to insist that the proposed payroll support can only be spent on payroll and benefits and keeps airlines from filing bankruptcy, which hurts everyone.
But does it hurt everyone? We’ll return to that question.
Sorkin expresses his opinion that this idea is fundamentally unfair, nothing that taxpayers are subsidizing hedge fund managers who are making a bet that airlines will be rescued (again) by the government. He notes this is fundamentally unfair and therefore a bad thing.
Nelson pivots back to her constituency, noting any shareholder advantage is tertiary to the airline workers who will keep their jobs and their livelihoods:
“The people I represent are betting on having a job. We’re going to have mass layoffs on October 1st. These are essential workers. It’s not for the airlines, it’s for the workers on the frontlines who deserve to have that protection.”
She also notes, “We as a country need to give more protection to essential workers.”
You can watch the exchange here:
But Are Airlines Essential Workers?
The word “essential” does not have a uniform definition.
Per the U.S. Department of Homeland Security, essential workers are those who “conduct a range of operations and services that are typically essential to continue critical infrastructure operations. Critical infrastructure is a large, umbrella term encompassing sectors from energy to defense to agriculture.” These include:
- medical and healthcare
- information technology systems
- food and agriculture
- transportation and logistics
- water and wastewater
- law enforcement
- public works
Thus, by most definitions airline workers are deemed “essential”. But essential has a broader meaning beyond this pandemic. And perhaps that standard, though nominally persuasive, is simply unworkable on a long-term basis when supply and demand are out of sync.
A well-connected nation and well-connected world is essential. Airlines provide far more than a connection from A to B. They are absolutely essential. But while the airline industry is essential, I have yet to hear a persuasive argument that any airline in particular is essential.
I do not want to any airline to fail, especially if recovery is around the cover, but Sorkin’s objection is hardly unreasonable. In fact, Nelson concedes that this bailout will directly benefit shareholders and hedge fund managers. Isn’t there another way? Airlines have proven over the last few months they have access to private capital. Isn’t it time to use it?
The full list of essential workers is 12 pages long. How can a nation possibly afford to continue to pay these workers during a prolonged recession? And what about the other businesses who may not be deemed “essential” but are certainly essential to the livelihoods of many Americans, mine own included?
I want to support airline workers. Heck, I’d like to support all workers. But I don’t have to be an economist to distinguish short-term deficit spending from a pattern of spending that is not only unsustainable, but may actually prolong the pain.
Are airline workers essential? Sure. But is any one worker of any industry essential? That’s a much harder sell.