Friday Apr 19

A Case Study of Atlanta’s Hartsfield-Jackson International Airport: Are Airports Economic Engines Allowing Urban Economies to Soar or the Overseers of Worker Plantations?

Atlanta is best known around the world for two things: being the birthplace and home of Martin Luther King Jr. and the location of ATL. The city and its residents are justifiably proud of the legacy of MLK and the growth and prosperity of the airport. ATL has been owned by the City of Atlanta for over 90 years, and the city has shepherded its growth from a dusty airfield in the middle of a racetrack back in 1925 to the busiest and most efficient airport in the world for the past 20 years. ATL employs more than 60,000 people and has a $70 billion per year economic impact (ATL Media Center, 2017), making metro Atlanta’s economy larger than 30 states in the U.S. (Palmer, 2017). The airport is a primary reason Atlanta ranks third in the nation as a home to Fortune 500 companies (Palmer, 2017). Under city guidance, ATL has become the largest economic engine in the southeastern United States.

Labor Laws in Georgia

In March 1947, Georgia was the seventh state to pass so-called “right to work” legislation prohibiting labor unions from collecting dues from non-union members represented in bargaining units. The overall posture of the state has been strongly anti-employee/union since well before 1947. Georgia has had “at will” firing policies since the late 19th century. At-will policies allow employers to fire workers at any time and for no reason. At-will policies cover some jobs in most states, but many states have adopted between one and three exceptions: public policy, implied contract, or covenant of good faith (Tejuoso, 2010). These exceptions require employers to have a “just cause” to terminate employment, and they provide some recourse to employees if they feel they are being unjustly fired. Georgia is one of only three states that do not allow any exceptions to the at-will rule (National Conference of State Legislatures, 2018).

The widespread popularity of at-will policies across the U.S. in the first half of the 20th century was one reason workers started organizing into labor unions. One of the most common parts of any collective bargaining agreement is a policy requiring just cause for terminating an employee.

In 1996, Georgia reformed its merit system to make all new hires unclassified, at-will employees. This was the most sweeping civil service reform in the U.S. (Kerrigan, 2012). The legislation eliminated annual pay increases, made the hiring process more flexible, and took away seniority for non-classified employees (Kerrigan, 2012).

In the 1990s, Patrick Cihon, a Syracuse University law professor, compared labor laws in all 50 states. His criteria included at-will policies and exceptions, whistleblower protection, drug testing, disability laws, and protection from having to commit a criminal act, among other variables. His analysis ranked Georgia as one of the worst three states (along with Alabama and Mississippi) in which to work (Kleiman, 1997).

Oxfam America (2018) recently completed a comprehensive analysis of labor laws and policies in all 50 states plus the District of Columbia. They used multiple metrics in the areas of wage policies, worker protection policies, and worker right-to-organize policies. Each state is ranked in the three areas and sorted into their Best or Worst States to Work Index. Georgia ranked 48th for the composite measure of the Best State to Work in; only Alabama, Mississippi, and Virginia had lower scores. Georgia ranked even lower, 49th, when wages were compared. In Georgia, the state hourly minimum wage is $5.15, which is the lowest in the country (along with Wyoming), and the federal hourly minimum wage remains $7.25 (“State Minimum Wages,” 2018). Georgia also received low wage scores for having a state law that prohibits cities and counties from passing higher minimum wage laws. Only Virginia and New Hampshire had lower wage scores than Georgia. Further, Georgia ranked 48th in the area of worker protection and 45th in the right-to-organize category.

Consequently, companies that compensate their employees more generously are at risk of losing bids and/or getting replaced by companies that pay their employees as little as allowable under state law. The corresponding impact on employee recruitment, employee retention, and customer service is both measurable and systematic.

Wages & Airport Working Conditions: Global & U.S. Low-Road Economic Policies

One of the most powerful global economic trends over the past 30 years has been described by critical economists as a “race to the bottom,” or the implementation of “low road” economic policies. The primary characteristics of low-road economic trends include outsourcing or hiring through subsidiaries rather than direct hiring, slashing wages to the bare minimum, cutting benefits, relaxing worker safety and training, making workers more vulnerable to wage theft, and perpetuating cutthroat competition (Hinkley, Bernhardt, & Thomason, 2016). In contrast, high-road economic policies consider shared prosperity (for workers as well as employers and shareholders), environmental sustainability, and democratic processes (e.g., labor unions) just as important as bottom-line profits (Rogers, 1990). Low-road economic policies are widely considered a primary driver of real wage decline and stagnation for average workers over the past 30 years. The airline industry and airports around the world have embraced these trends as strongly as any other industry.

Since the airline industry was deregulated in 1978, two low-road economic trends have emerged that affect jobs at airports: (1) a huge increase in job outsourcing and (2) a decline in average wages for most ground-level airport jobs.

Before deregulation, most airport workers (e.g.,baggage handlers, ticket agents, plane fuelers, wheelchair attendants) were employed directly by airline companies. The jobs tended to be permanent and typically paid living wages (Dietz, Hall, & Jacobs, 2013). After deregulation, the tendency for airlines to contract the jobs out has increased precipitously. Between 2002 and 2012, the outsourcing of baggage porter jobs more than tripled, going from 25% to 84%. During that same period, vehicle and equipment cleaning jobs went from 40% to 84% outsourced (Dietz, Hall, & Jacobs, 2013). Concomitant with outsourcing, average wages for these jobs declined over the same period. Measured in 2012 dollars, baggage porter jobs went from $19 to $10.60 per hour (a 45% decline) while cleaning jobs fell 25%, from $15 to $11.40 per hour.

Wages & Jobs at ATL

In 2017, Burns, Toros, & Flaming conducted the most comprehensive study to date on wages earned by airport workers. They estimated 20,054 workers at ATL made less than $15 per hour. Of these jobs, 21% (a total of 4,211) paid workers the federal minimum wage, which remains $7.25 per hour. The study compared jobs and wages at 21 major U.S. airports, and ATL had almost twice the number of sub-$15 per hour jobs compared to Chicago’s O’Hare (11,746) and New York’s JFK (10,733) airports, the second-and third-highest numbers, respectively. ATL’s large number of sub-$15 per hour jobs is related to multiple factors, including being the largest airport in the country and all the issues described above concerning Georgia’s labor laws, unchanged minimum wage, and antipathy toward unions, as well as ATL’s reliance on outsourcing and other low-road labor policies. While five other airports in the study also had minimum wages of $7.25 an hour, Atlanta had twice as many workers making this wage compared to the next-closest major airport: Houston Intercontinental Airport had 2,173 workers earning $7.25 per hour. Job postings from August 2018 by Delta’s subsidiary, Delta Global Services, offered $8 an hour for important jobs at ATL, such as fueling aircraft.

Interviews we conducted with a small sample of airport workers and union officials (n = 24) suggested that airlines at ATL outsource most ground-level jobs and practice low-road labor policies. Three members of the International Association of Machinists (IAM) stated that they used to have a strong bargaining unit of ramp workers at United Airlines, but six years ago, the airline outsourced all those jobs and broke the union. IAM organizers are currently involved in a multi-airport organizing drive of 15,000 ramp workers for Delta Airlines. They reported that Delta is opposing the unionization drive in multiple ways, such as by putting up anti-union billboards, leaving anti-union flyers in break rooms, and threatening prounion employees with termination. One Delta worker, who is actively organizing her fellow workers, stated her supervisor told her that holding down a second airport job was a “conflict of interest” and tacitly hinted she should quit. Her Delta job is classified as “ready-reserve,” which involves a maximum workweek of only 24 hours (and a limit of 1,400 hours per year). Hourly pay for ramp workers was $10.50 until an October 1, 2018, raised to $14 per hour. The union organizers stated that the pay increase was a move on Delta’s part to thwart the organizing drive. The ready-reserve worker we spoke with stated that Delta stopped harassing her after she got a labor lawyer to send her supervisor a letter about this unfair labor practice.

That same ready-reserve Delta employee was fine with working only 20 to 24 hours per week because her other job paid $19 an hour (with a full union benefit plan, including healthcare and a pension), but she stated that many ready-reserve workers desired full-time status. It was common for workers to remain ready-reserve for two to three years or more before being allowed to work full time. If there was even one blemish on your record, you would not be offered full-time employment. The widespread use of part-time, ready-reserve employment classification is another example of low-road employment practices.

By far the most evocative quote we heard during interviews with airport workers was that many feel like coming to work at ATL is arriving at “the plantation.” Interviewees stated that it was common parlance for them and their fellow employees to call ATL the plantation; the connotation being that they felt like they were performing slave labor in an oppressive environment.

Perspectives from TSA Officers

TSA interviewees also expressed concern about further privatization of security positions if a state-appointed airport authority were to take over ATL. Privatization has already encroached on several TSA jobs at the airport, including security officers at airport exit lanes and those who screen airport employees upon their arrival at work. TSA used to staff these positions, which were typically reserved for security officers coming back from an injury or sick leave; however, these jobs are now staffed by Priority One Security and HSS, both of which are private companies. The person we interviewed stated she knew many of these security officers and that both their pay and employee morale were low. She also relayed that while morale is low at TSA, “it is much lower” and turnover is significantly higher for the security officers working for these private companies. Her observations are supported by historical empirical literature (see GAO, 2000), which indicated that among privatized, non-union security screeners, turnover was very high (within ATL, there was 375% turnover per calendar year) and morale was low. importantly, these issues increase the chances of security mistakes.

Perspectives from Food Service Workers Represented by UNITE HERE

UNITE HERE labor union represents 1,500 food service workers at ATL. These individuals work for multiple restaurants in various capacities, including
tending bar, waiting tables, cooking food, running cash registers, bussing tables, and everything else required to run a restaurant or fast food establishment. In November 2018, the authors of this report held an impromptu 30-minute focus group with a dozen UNITE HERE members.

The UNITE HERE union members we interviewed were a veteran group of airport workers. The average time spent working at the airport seemed to be well over five years. Two participants had been there 12 and 15 years, respectively, and one person had been there for 18 years and was currently making $13 per hour as a cook. Hourly wages for this group of experienced workers ranged from $12.13 (18 years’ tenure) to $21 per hour. The average wage earned was approximately $14 per hour. Several interviewees were tipped workers currently making $3 per hour plus tips.

There was a strong consensus that the starting minimum wage at the airport should be $16 per hour. Most workers around the table had other sources of income, such as catering or hair styling, but it appeared these side jobs were sporadic and continuations of earlier careers. Many felt that earning $20 an hour or more would be required to afford to live near the airport, since the prices of homes in the vicinity were, for example, $1,000 per month for one- or two-bedroom apartments. One person commutes daily from Gwinnett County to be in a more affordable area that offers decent schools, as they would not have the same opportunities if they were to live closer to ATL.

Another union member we spoke with was living in an extended stay hotel, due to being unable to afford more permanent housing. This person had until relatively recently been living out of suitcases at the airport—homeless at their place of employment. They had been keeping this a secret out of shame but tearfully shared their sense of desperation during the focus group. They confided that they sometimes had to go without food, as paying the cell phone bill and the weekly hotel fee had to come first. And their children were now part of the foster system as a result.

Poverty, Inequality, & Social Mobility: Georgia, Atlanta, & Airport-Adjacent Cities Poverty

The percentage of families living below the federal poverty line (FPL) in Georgia (13.6%) and Atlanta (21.3%) are higher than the national average (11%), but in four cities immediately surrounding the airport—College Park, East Point, Forest Park, and Riverdale—rates are two to three times the national average. The figures for children living in poverty are even worse (see chart on right). Considering that ATL is the largest employer and economic driver in Georgia, the poverty statistics in four out of five suburbs surrounding the airport are staggering.

Income Inequality

Considering Atlanta’s higher-than-average poverty rates, it is not altogether surprising that it is one of the most economically unequal cities in the U.S. The Brookings Institution measured income inequality in the 50 largest U.S. cities each year from 2012 to 2014 (Berube, 2014). Its reports compared the lowest income of the wealthiest 5% of the population (i.e., the 95th percentile) to the highest income of the lowest-earning 20% of the population (i.e., the 20th percentile) and calculated the ratio (that is, how many times richer the 95th percentile was than the 20th percentile). For example, if those in the 95th percentile had annual incomes of $200,000 and those in the 20th percentile had annual incomes of $20,000, the ratio would be 10 because 10 x 20,000 = 200,000.

In 2012 and 2013, Atlanta had the greatest income inequality among the 50 largest cities in the U.S. Those in the 95th percentile earned almost 20 times the yearly income of those in the 20th percentile. In 2012, Atlanta’s 95th percentile earned $279,827 and the 20th percentile earned $14,850, which is a ratio of approximately 18.8 (18.8 x $14,850 = $279,827). The average ratio among all 50 largest U.S. cities was 10.8, which means the 95th percentile makes almost 11 times as much as the 20th percentile. The inequality ratio in Atlanta (18.8) was also double the 9.1 ratio for the entire U.S. population (no matter where people lived). Inequality in Atlanta is more pronounced than it is in the largest U.S. cities and even the nation.

Economic Mobility

Closely related to high rates of poverty and inequality is economic mobility, defined as the likelihood of a person moving from a lower economic position to one higher than their parents as they move into adulthood. Upward mobility has been a prominent and enduring part of the American Dream, and for most of the 20th century, incomes tended to rise with the growth of GDP and productivity (Reich, 2014). For example, median household income (adjusted for inflation) approximately doubled from the 1940s to the 1970s (Stone, Trisi, Sherman, & Taylor, 2018).

Chetty, Hendren, Kline, & Saez (2014) compared the economic mobility of millions of children born from 1980 to 1982 using income measurements from 2011 and 2012, when the sample had turned 30 years old. Upward income mobility in Atlanta ranked 48 out of the 50 largest U.S. cities. The only cities that had lower mobility rates than Atlanta were Milwaukee, Wisconsin, and Charlotte, North Carolina. In fact, Atlanta’s economic mobility rates were even lower than “any developed country for which data are available” (Chetty, 2014, p. 2).

Union Density & Inequality

One reason Georgia and Atlanta have such high rates of poverty and income inequality is because labor union density in Georgia is among the lowest in the country. According to the U.S. Department of Labor, in 2016, 3.9% of employees in Georgia were represented by a labor union; the only states with lower rates were North Carolina (3.0%) and South Carolina (1.6%).

Examining national statistics from 1918 to 2008, Colin Gordon (2012) found direct, dramatic correlations between union membership and the share of national income going to the richest 10% of the population. When union density was low (i.e., when fewer workers were union members), the richest 10% had larger shares of national income compared to when union density was highest. Gordon also found a direct, linear relationship between inequality (measured by Gini indexes) and union density by state between 1979 and 2009. During this period, union density declined across all states and Gini indexes grew in the direction of higher inequality. Gordon’s analysis found that union density was lowest and inequality highest in Southern states like Georgia that had strong anti-union “right to work” laws on the books. Union density in Georgia has never been very high, so it is not surprising that metro Atlanta and Georgia have high rates of poverty and inequality.

Organizing for Improved Airport Jobs

Airport workers around the country have not just sat back and passively allowed deregulation, outsourcing, and other low-road economic practices to take away and erode good airport jobs. Workers have been organizing unions; forming coalitions between labor and community organizations; passing higher minimum wage laws; and fighting back to improve wages, working conditions, and the safety and security of airport jobs. These various efforts have resulted in at least 21 airports having minimum wages higher than the federal minimum of $7.25 per hour, which remains the minimum at ATL and in Georgia. It is beyond the scope of this report to highlight all of these efforts, but we briefly describe three worker-led successful campaigns in three geographically disparate regions: San Francisco, Miami, and New York/Northern New Jersey.

In 2000, San Francisco International Airport (SFO) was one of the first U.S. airports to begin implementing minimum wage standards higher than federal, state, or local minimums. In addition, SFO went beyond wages and created the Quality Standards Program that improved benefits and training standards. The program had an overall goal of “enhancing security and safety” at the airport (Dietz, Hall, & Jacobs, 2013, p. 18). SFO’s efforts to improve safety and security and to link the issues to wages and working conditions of ground-level airport jobs was prescient considering the 9/11 terrorist attacks were still a year in the future. SFO’s efforts came in the wake of a 2000 federal Government Accounting Office (GAO) report that linked high turnover rates (ranging from 100% to 400%), poor pay, few benefits, and stressful working conditions to poor performance among airport security screeners, who were all outsourced to private
companies at the time (Dietz, Hall, & Jacobs, 2013). In the GAO (2000) study, Atlanta had the second highest annual turnover rate, 375%, for airport screeners between May 1998 and April 1999.

A comprehensive study of the effects of SFO’s Quality Standards Program found the following: Employee retention went up and turnover went down 34%; wages increased 22% on average; security screeners’ wages increased even more, from an average of $13,400 to $20,800 per year; absenteeism went down; disciplinary infractions went down; and worker performance, morale, and customer service improved (Reich, Hall, & Jacobs, 2003).

Since 2000, at least 21 U.S. airports have instituted minimum wages higher than federal and state rates. The table below shows the minimum wages paid at 22 major airports.

Workers were involved in practically every one of these campaigns to raise wages through either direct union involvement or joining with community organizations to raise the minimum wage in an entire city or state. While many of these successful campaigns took place in states that are friendlier to organized labor than Georgia, workers at two airports in the deep south—Miami and Fort Lauderdale—organized and won substantial wage increases for many airport workers. The most recent campaign in Miami was earlier in 2018. A member of the UNITE-HERE labor union testified before county commissioners
that he arrived at his airport warehouse job at 4 a.m., worked until 2 p.m., changed clothes during a one-hour break, and then went to his barback job at an airport restaurant. He did not get off work until 10 p.m. (Hanks, 2018). After his testimony that day, the county commission voted unanimously to pass the new living wage ordinance that applied to many airport jobs. The new minimum wage for covered jobs is now $15.38 per hour (Hanks, 2018). Interviews with ATL workers and union officials suggested it is not uncommon for employees to work two jobs at the airport.

After a hard-fought, multiyear campaign, a variety of airport worker unions at the three airports servicing New York and Northern New Jersey (JFK, LaGuardia, and Newark Liberty airports) won the largest step increase in minimum wage for airport workers in the country. While the minimum wage for all workers in New York State rose to $15 per hour at the end of 2018, the minimum wage for airport workers will continue step increases to $19 per hour in 2023 (Barone, 2018). Workers at the Newark airport stand to gain the most, as the state’s minimum wage remains $8.60 per hour and many jobs at Newark Liberty pay approximately $10.45 per hour today (Barone, 2018). The Port Authority conducted an “analysis and justification” report, which linked low wages to high turnover that “threatened to make airports less safe and degrade services provided to travelers” (McGheehan, 2018, p. 2). The Port Authority study also pointed to benefits other airports had experienced from raising the wages of airport workers (McGheehan, 2018).

A Positive Path Forward for ATL

The largest and most powerful economic engine in the southeastern United States can either continue to be a purveyor of 20,000 jobs that keep workers and their families at or barely above poverty levels, or, ideally, it can become a dynamic catalyst for living wage jobs that leads Atlanta away from being the most unequal, as well as one of the poorest, cities in the U.S. We envision ATL becoming a national example of a city-owned airport that provides more living wage jobs, offers better customer service, and maintains a safe and secure environment, all  while upholding its efficiency and profitability for the airlines and companies doing business there. ATL should strive to become a place where workers are happy to come to work rather than feeling like they are reporting to the “plantation.”

Raising the minimum wage at ATL to $15 an hour would increase aggregate annual income by $151 million for the 20,000 workers currently earning less than that rate of pay. Since these are low- to moderate-income families, they would spend most of this additional income in the local economy. Through what economists call the multiplier effect, their increased spending would create an additional 1,831 jobs and ultimately a $307 million annual boost to the local economy (Burns, Toros, & Flaming, 2017). Burns, Toros, & Flaming (2017) also estimate that a $15 minimum wage at ATL would significantly reduce the number of airport workers relying on SNAP (formerly food stamps) and Medicaid.

Regardless of employment structure, essential ground services enable airlines to generate profits. Accordingly, the workers who provide those services deserve good jobs that provide living wages and health insurance, ensure continuity of work when airlines change contractors, and protect their rights to band together in unions to improve their lives. Elected officials and other decision makers should drive airport workforce policies toward these goals and hold airlines accountable.

If MLK were alive today, where would he stand on the issue of 20,000 poverty-wage jobs at ATL? In a speech he gave in 1961, MLK said, “As long as there is poverty in this world, no man can be totally rich even if he has a billion dollars” (Mieder, 2010, p. 225). Can ATL truly be the world’s best anything when it is complicit in perpetuating cycles of poverty that impact not only airport workers but also the city? ATL has a singular opportunity to serve as the catalyst for a decrease in Atlanta’s embarrassingly high family and child poverty rates. The airport can continue to be the busiest in the world while also providing more living wage jobs than any other airport. And why shouldn’t ATL, the southeastern U.S.’s largest economic engine, become a national model of living-wage jobs, ensure safe and secure airport operations, and foster MLK’s legacy?

Fred Brooks is associate professor at Georgia State University in the School of Social Work. Amanda Gutwirth is a graduate student in the masters’ program at the GSU School of Social Work. This study was done with the support and cooperation of the Atlanta-North Georgia Labor Council Roundtable. References and recommendations for changes to improve the status of workers at Hartsfield-Jackson International Airport as well as the entire report are available at www.socialpolicy.org.

 

 

 

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