The story is a familiar one. Lower-wage employers aren’t able to find workers when they can make as much or more on pandemic unemployment, perhaps they still have stimulus money banked, and they need schools to re-open so they can work without childcare expenses.
Airports are having a difficult time because on-site businesses employ a lot of low wage workers. For instance go find someone to help a passenger in a wheelchair at major airports today. I’ve heard several stories recently about flight attendants finding wheelchairs and pushing passengers to their next gate.
American Airlines blames a worker shortage (drivers in particular) for difficulty catering planes at Dallas – Fort Worth, and says several Starbucks remain closed there because workers aren’t available.
I’ve written about why employers might be willing to pay up front bonuses to hire someone, but are reluctant to raise wages very much in hopes of attracting workers back into the labor market.
Dallas – Fort Worth airport has a strategy to keep wages down: tell businesses at the airport not to poach from each other. Someone currently willing to work $15 an hour shouldn’t be hired away at $16.
Leslie Josephs reports on a memo sent by DFW airport to businesses on property telling them not to try to pay more money to hire workers away from other airport businesses:
“As you know, we are experiencing one of the greatest hiring challenges in the history of DFW Airport,” Ken Buchanan, executive vice president of revenue management and customer experience, wrote to concessionaires in a May 27 letter reviewed by CNBC. “As we prepare for a busy summer, please continue to practice DFW Airport’s high standards of hiring operations and refrain from soliciting employees from other DFW operations (‘poaching’).”
Concessionaires like the idea so much they want to make it a requirement of airport leases,
Gilbert Aranza, CEO of Star Concessions, which operates or jointly runs more than 50 food, beverage and retail businesses at DFW and Dallas Love Field, said he wants the airport to add rules against employee poaching in leases. He said the idea was inspired by the NFL’s anti-tampering rules, which prohibit rival teams from courting a player who is under contract with another club.
This particular big airport business is chafing, apparently, because they had to pay an extra $1 an hour to retain a worker,
A cook at one of his other restaurants, who declined to give her name, said she was approached by a manager at another eatery asking if she would join for $1 an hour more, or $16. Aranza’s restaurant matched the proposed increase.
Concessions workers don’t make nearly as much as NFL players. They also aren’t generally under contract, either. Non-compete agreements often aren’t enforceable against low wage workers, so they’d like the airport to do their dirty work for them. It’s not clear, though, that this would pass muster at the Department of Transportation where far more money is on the line than that garnered from concessions leases (or Department of Justice, for that matter).
There’s finally demand for the services these worker are offering, and businesses and government entities (airport authorities) are colluding to make sure they can’t since it would crimp margins.
There are anti-trust issues with the airport’s strategy.
This is not only wrong it is illegal. The NFL analogy is not a good one because those players are part of a union and they ratified a collective bargaining agreement which has certain rules. Unless there was a similar CBA, this is collusion which seeks to artificially declate wages and is a huge labor rights violation. Please report this to the national labor relations board for enforcement. People asking for more money is free enterprise, businesses have the right to say no and look for employees elsewhere. They can also raise their prices to cover their labor.
Wow, that’s a huge lawsuit just waiting to happen.
I’d say sue their asses, but the particular management that put these in place won’t be the one paying for it, the consumers or taxpayers will
Yeah. Can’t believe anyone in legal signed off on that. Not only that they said don’t poach now but that they claim it was a policy in place earlier.
In another context, this was deemed illegal and the companies involved (e.g. Apple and Google) were forced to remunerate the class of employees.
https://www.inc.com/jeremy-quittner/silicon-valley-wage-collusion-class-action.html
I wish the DFW airport authority didn’t feel so confident in their approach that they could discuss it publicly. I wish we had a robust system that would go after the illegal tactics of oppression being used here.
As an owner, complain all you like! Raise prices. Automate more. Close shop. Work more hours personally. There are options! Illegally colluding to suppress wages is not one of them.
Headline from May 13, 2021, Dallas Observer, “Restaurants Promising $20 an Hour to Lure Workers.” Why work at DFW with their ongoing airport scheme to keep employee wages down when you can earn the big bucks while working as a barista serving a crappachino at a Starbucks?
Despite the illegal anti-trust concerns, this is reprehensible. These concessionaires have a captive audience; their profit margins are incredible. Yet, they are so filthy greedy that they cannot pay their employees. Time to revike their privileges. If they cannot operate a proper business, it is time to find a management team that can. Fire the airport authority as well.
this Gilbert Aranza person seems like one of the dumber CEOs out there
Screw corporate America and governments. Until society realizes that there is a huge benefit from an educated, healthy, well paid society, we are going to continue to sink. Our own greed continues to drive us down. Too many people have more than enough but don’t want to pay their fair share when it comes to creating a better country for all.
In what reality do you live? How far do you think the stimulus funds will last a single person, let alone support a family?
Wow. That just screams antitrust and is going to land the airport is some hot water fast.
The NFL has a bargaining agreement and players are under CONTRACT (not at-will employees like DFW’s workers). Just shameful!
@Robin Rosner – If you have to pay for childcare, and the stimulus funds can get you through to September if schools are reopening, then yes, that is definitely a big part of it.
The simple strategy for employers is to pay more. Or introduce automation to replace workers.
As Daniel wrote, that sound like a straight up antitrust issue. Companies have repeatedly gotten in trouble for non-poaching agreements.
Who do they think they are, Google? Apple?
Bottom line, as despicable as the practice is, it’s probably cheaper to engage in and settle if caught than it is to pay higher wages. Of course legal signed off on it. It cost Silicon Valley all of 10-15% of the wages they would have had to pay in a true free market when they settled in 2014. Not to mention them constantly claiming they need more and more H-1B workers, which also drives down wages. Companies are driven by quarter to quarter results, colluding on wages will take 5-10 years to be dealt with, if ever. By then, the people in charge will be long gone and any liability will be pennies on the dollar.
Or the airport and their concessionaires could offer free childcare and be flooded with $15/hr worker applications.
Airports are always competing with other workers. It is simply easier to not have to park in a remote lot and board a bus to the terminal.
Airlines get by with the hassles of airports because employees get flight benefits but airport support people do not.
The story is a familiar one – but it is also not true. When you write: “Lower-wage employers aren’t able to find workers when they can make as much or more on pandemic unemployment, perhaps they still have stimulus money banked, and they need schools to re-open so they can work without childcare expenses.”
While it is true that workers did receive something a little closer to a living wage on unemployment, here in Charlotte the issue is not people choosing a “fat” unemployment check over a minimum wage job. They have simply moved to higher paying jobs on offer.
The Charlotte, NC Unemployment Rate is at 4.70% (Dallas is 5.3%), compared to 4.90% last month and 13.60% last year. This is lower than the long term average of 5.16%. School bus drivers make more than airport employees. Burger flippers make more than airport employees. Amazon wharehouse employees make more than airport employees. Many of these employers also offer benefits.
So at least in the Charlotte region, it is the free market doing its thing. And not free loaders. In order to get the workers you need, you will need to offer a competitive package conform market trends.
Just flew AA, DFW-SFO in First. (DFW) Catering never arrived to fill flight. We were delayed as we waited so FA asked for a show of hands whether to wait or fly w/out meals (lunch), snacks or most beverages. We voted to fly and were only entitled to 1 water/pp in flight (as that’s all that was left from the previous flight). Darn labor shortage!
I guess this is the red state Republican version of “free enterprise” and “letting the market decide.”
Par for Texas.
Considering that they often end up killing their citizens so that corporations can avoid regulations, noting they do there surprises me.
After all, we have our newest national holiday – Juneteenth- to thank for Texas. They just didn’t get around to telling slaves that they were free. FOR TWO YEARS.
So, illegally restricting compensation? Hardly a kerfuffle in authoritarian Texas.
It’s only a “free market” when it benefits the corporation, otherwise it’s a race to the bottom when it comes to workers. The corporations will find a way to subjugate their drones every time stuffing the money in the 1% ers pockets.
Truly impressed that this typically anti-union writer wrote such a pro-worker piece!
Yeah…it’s pretty bad, and I work here. I was paid 11 an hour cleaning the Admiral’s Club and wanted to move to somewhere else that paid 14 an hour but they said “you can only have it part time” and “we can’t hire you because of a contract”.
Not using my real name for obvious reasons
So my 10 dollar sandwich or 3 dollar water bottle can’t support an additional buck an hour for the employee?
Pay the wages needed to hire help and raise your prices. Or find a way to automate or do without the job
Ken Buchanan is a disgusting person.
Coming from a former employee of The DFW Airport Board I can attest this place is the dirty political White House of north Texas. From 2001-2018 I only averaged 2.8% annual raise working for the airport itself, meanwhile AVP and up received much larger percentages as well as bonuses and hefty car allowances. Oh and now I see the airport has brand new Teslas at curbside for department vehicles. The Airport is very similar to a City except City’s have oversight from residents and city council, the airport has no oversight hence it is a run away train with Ft Worth and Dallas funding their wasteful spending.