Not just chaos theory but simple laws of probability teach us that things sometimes happen in clusters, and so it is that we have two labor-management disputes in the news as this week begins, a strike authorization vote at Hawaiian Telcom and an escalation of labor-management tension at Qantas.
In the movie "The Maltese Falcon," Humphrey Bogart and Sydney Greenstreet act out a memorable conversation about how demands aren't taken seriously unless backed up by force or the threat of force. This is well-known to labor unions, who must be taken seriously by employers chiefly because they have the option to disrupt business and cost shareholders money.
The interesting thing about strikes and other job actions is that they are joint efforts by many people, and a critical component of such an event is a widely-held belief by a lot of people that they are in the right. For this condition to be met, it is necessary either for management to be unfair, or to be seen as unfair. Sometimes the situation is clear-cut, sometimes it is not, and good people on both sides can have differing views of the matter.
Hawaiian Telcom's union workers, represented by the International Brotherhood of Electrical Workers (full disclosure: this union also represents many technicians and engineers in the broadcasting industry and I have some dear friends back in Washington, D.C., who are IBEW members; the union also represents some of my colleagues at HawaiiNewsNow), work under sometimes difficult conditions. They get called out at night and on weekends. They work outdoors in all kinds of weather. They sometimes work on the same utility poles that carry electrical lines.
There exists, from the days when the telephone company was a lavishly-staffed monopoly, a public expectation that the service will always be there no matter what. But at the same time, Hawaiian Telcom is not the monopoly that its distant predecessor was. Much of its revenue base has dispersed to a variety of wireless providers, and even when the company has managed to hand off a former land line account to its own wireless division, the profit margin is smaller. It is false to lay this at the doorstep of the current management because it came in after this happened, and because every telephone company on the mainland has the same problem, some of them more so.
Anyone who works for - well, for anyone else, practically - will be astonished to learn that Hawaiian Telcom union workers get free medical and up to 26 weeks fully paid sick leave per year. The company, in what it said was its final offer, called for a 10% copay and eight weeks full paid sick leave per year plus a workers compensation program.
Let's be frank here: if the existing benefits called for eight weeks sick leave and the company wanted to cut it to four, outsiders would consider that reasonable, and would be surprised that the union was so upset about it. Most of us don't even get that much. How can the workers consider this unfair to them given current economic conditions and the changes in their own industry?
This is why. First, they've already made concessions. Second, they're not asking for wage increases. The company is offering something like 1%, not enough even to keep up with inflation, even now. Third, and maybe this is most important, if there is one thing I've learned in my personal experience negotiating contracts from both the labor and the management side of the table, it is that both sides have an infinite capability to persuade themselves that whatever they have already should never be changed except to improve it, no matter how much profits have improved (management) or no matter how much the company is going into the toilet (labor). It's human nature.
I'm not taking sides, in part because I don't know how much actual sick leave Hawaiian Telcom workers take, and it is the actual amount of leave taken that determines the cost of a benefit like this.
One footnote on Hawaiian Telcom: Current management has been slammed for outsourcing some jobs, but the creation of Hawaiian Telcom a few years brought office functions back to Hawaii from the mainland, and even now there is a net increase of jobs from the Verizon Communications days.
Now let's turn to Qantas.
Three unions, representing pilots, mechanics and other workers, have been gradually increasing work stoppages against Qantas. In place of the regular sort of outright strike, they've been reducing the hours they will work. After cutting back service, Qantas executives decided that the mechanics were no longer working enough to guarantee the safety of service, and on Saturday they somewhat dramatically shut the airline down. I mean all of it. Jets that were literally on taxiways turned around and returned to the gate. Only flights already in the air kept moving.
The Australian government, angry at getting only three hours' notice behind the scenes that this was going to happen, convened hearings and ordered (1) the airline to fly, and (2) the unions to halt job actions and return to the bargaining table. What started as a lockout has turned into the reverse, in which the employees are more or less locked in until an agreement is reached.
The backstory of the Qantas situation is interesting. Faced with mounting labor costs that have put the world's number ten airline at a competitive disadvantage, Qantas founded a discount subsidiary called Jetstar, basing it in Southeast Asia where the labor laws are different, and placing its subsidiary in direct competition with itself. For example, Jetstar now flies more Australians to Honolulu than Qantas itself does.
This is reminiscent of Texas Air, a one-time holding company of Continental Airlines, which bought Eastern Airlines, sold its profitable New York-Washington shuttle to Donald Trump, then began canceling its other profitable routes while simultaneously having Continental launch service in the same place. In those days Eastern was union, Continental was not, and when the owner was done, he had killed Eastern and made Continental into one of the major U.S. carriers.
The rightness or wrongness of either side in the Qantas dispute can be argued by people who know more about the relative labor costs of Qantas, Cathay Pacific, etc. But it safe to say that in the Qantas case, like the Hawaiian Telcom case, the elephant in the room is a changing environment for the industry the companies are in, something ignored by the players at their peril. Labor needs to realize this, but there is also something management needs to realize. Again I refer you to "The Maltese Falcon," when Bogart's Sam Spade assures Sydney Greenstreet's Gutman that he can't find the bird without him so he can't kill him. Gutman agrees, but adds, sometimes in the heat of passion, men do things which are not in their best interest.
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