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Booker, Brown Introduce Bill Aimed at Outsourcing Trend

Bill holds airline industry accountable for increasing shift to outsourcing labor costs, a key factor in wage stagnation

November 2, 2017
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WASHINGTON, D.C. – U.S. Senators Cory Booker (D-NJ) and Sherrod Brown (D-OH) today introduced a bill targeting the trend of companies outsourcing much of their labor costs to contractors and temp workers rather than hiring direct employees. The bill requires airlines and their subcontractors to comply with core federal labor laws.  

While the practice of subcontracting is pervasive across many industries, the bill specifically targets the airline industry, where good-paying jobs that were once provided by the airlines – including wheelchair attendants, baggage handlers, and caterers – are now contracted out, often to the lowest bidder. Between 1991 and 2015, the portion of workers in air transport-related industries employed by subcontractors and contractors roughly doubled.

This shift towards outsourcing has a direct impact on workers’ wages, with a recent study finding that 37 percent of all airport workers make less than $15 an hour, with average weekly wages falling by 14 percent from 1991 to 2011. In other industries too, outsourced and subcontracted workers’ wages suffered compared to their non-contracted peers, including up to a 17 percent dip in wages for subcontracted janitors and cleaners and an 8-24 percent cut for security guards.

Further, outsourcing allows airlines and other major corporations to shield themselves from responsibility for rampant violations of Federal labor law incurred by their contractors. For example, two of the largest airline contractors have each racked up dozens of infractions relating to worker pay and workplace safety.  

“The American economy is strongest when hard work is fairly rewarded, and when more Americans have the ability to get ahead with hard work,” Senator Booker said. “Unfortunately, these principles are slowly eroding as companies contract out once-good paying jobs to the lowest bidder. This trend is a key factor in explaining why wages aren’t rising as fast as they should be, and for the persistent weakening of labor protections that generations of Americans have fought for. Our bill – while by no means a panacea – ensures that airlines and their subcontractors comply with labor laws as a condition for taxpayer-funded air travel. This is an important first step in holding airlines accountable for this shift and restoring the fundamental compact that if you work hard in America, America will work for you.”

“At a time when the average salary for airline CEOs is in the millions, it’s unconscionable that so many airport workers live in poverty,” Booker added. “Forget about rising from the mailroom to the boardroom – subcontracted workers are stuck.”

“The increasing use of contract work by airlines is an alarming trend that drives down wages and workplace standards for all workers. These jobs should be an opportunity for people to earn a fair wage and provide for their families – not an opportunity for airlines to drive down wages,” said Senator Brown, who released a case study on airline workers as part of his plan to make hard work pay off this spring.

The Airline Accountability Act leverages the multi-billion dollar federal air travel market to hold airlines accountable for the workers—both direct and contract—that are helping to drive record profits. The bill prohibits federal employees from flying on airlines that have either committed egregious labor law violations and/or contracted with vendors that have incurred, and failed to rectify, serious worker or labor infractions.

Specifically, the bill would do to the following:

  • Requires airlines competing for contracts with the GSA City Pair program, which governs the vast majority of federal employee travel, to disclose to the Department of Labor any labor law infractions by the airline themselves as well as by any of their contractors in the preceding three years.

  • Empowers the Secretary of Labor to determine corrective measures by airlines and/or their contractors to remain eligible for the City Pair program.

  • Requires the Secretary of Labor to prepare a list of airlines that are ineligible for City Pair contracts for that year based on serious, repeated, willful, or pervasive violations of labor laws.

Dating back to his days as tenant lawyer, City Council member, and Mayor of Newark, Booker has been a leading voice for economic justice and the fundamental promise that if you work hard in America, America should work for you. As part of this commitment he has been a vocal advocate for fair pay and benefits for airport workers. In May, he and Senator Sherrod Brown (D-OH) sent letters to the CEOs of ten major airlines urging them to improve the pay and benefits of their subcontracted workforce. Later that month, he joined SEIU members and local officials for a rally at Newark Airport in support of raising the minimum wage. In September, he urged the Port Authority of New York and New Jersey to raise the hourly wage for workers at airports under its jurisdiction to $15.