The long and sometimes acrimonious contract negotiations between Southwest Airlines and its mechanics’ union may be nearing an end. The shape of any ultimate agreement should help indicate how fast mechanic wages will increase in light of the much-discussed potential shortage of aircraft mechanics. So far, it looks like mechanic wages will accelerate, but not dramatically so.
By May 21, the Aircraft Mechanics Fraternal Association (AMFA) expects to have completed the vote on its tentative agreement with Southwest, according to AMFA Region Director Earl Clark. AMFA represents more than 2,700 aircraft maintenance technicians and appearance technicians at Southwest.
The tentative agreement would increase the base rate pay scale as of April 1, 2019, for each step of a mechanic’s career by 20% and then increase these pay scales further by 3% in August of 2019, 2020, 2021, 2022 and 2023.
Other changes include new pay scales for lead maintenance controllers and maintenance controllers, changes in license premiums for technical instructors and technical support technicians, shift premiums and skill premiums. The tentative agreement would run through Aug. 16, 2024, with up to a one-year re-opener under Section 6 of Railway Labor Act.
How much is the new agreement worth to workers? Southwest mechanics get a starting wage as new hires, and six months later they get their first raise. Every year afterwards on their personal anniversary for the next four years they get raises, Clark explains. After four years they are considered topped out. These are the ‘steps’ for which pay scales have been raised. “The only raises employees on the top of scale get are contract anniversary raises, in Southwest case it has always been Aug. 16.”
But the last pay increase for individuals on top of the pay scale was on Aug. 16, 2012, after which the old contract ran out. So that 20% initial increase in the new agreement is catching up for 6.5 years of no generally applicable raises. This 20% is equivalent to 2.8% a year for 6.5 years.
Over the same 6.5 years, consumer prices increased about 9.2%, according to the Personal Consumption Expenditure Index, or 1.4% annually. So the real increase in wages from 2012-19 from that initial 20% would be 1.4% annually.
As for the future, U.S. prices are expected to increase about 2% annually for the next five years. So the tentative agreement’s 3% annual boost looks like it will produce about a 1% annual real increase in wages.
That pace would be a modest improvement over earlier, industry-wide wage increases. For example, from 1999-2016, average real wages for all aircraft mechanics and avionics technicians rose only 0.6-0.8% per year. So 1-1.4% increases should help make airline mechanic work more attractive, but maybe not dramatically so. The real challenge in attracting new mechanics likely remains in the independent MRO sector, where base wages are lower than they are for even cost-conscious airlines like Southwest.