Just vote NO! The math.

We've all heard it. Most of us have probably said it at one time or another. The logic being that if we "hold out" a better offer is sure to be coming, sooner or later. It's the later bit that gives me pause. Here is a little example, using arbitary number (please feel free to tweek as you see fit) to illustrate the cost of "Just voting No". This example assumes a relatively low inflation rate of 4% (This will increase in the future as the cost of the rampant Fed money printing is felt, but for now we will assume things remain stable)

Example: Management offers labor a 20% pay increase. Union negotiators refuse it , believing that more is possible. They succeed , eventually, after three years, in brokering a 30% pay raise for a five year contract. Not bad eh?
Actually it stinks.
Here is the math. We look at it over the eight year period when negotiations commenced and management's first offer was rejected until the end of the negotiated five year contract:
Money lost on paper = 20% X 3 years = 60% (The time you got ZERO pay increase)
Time value of money lost @ 4% p.a. compounded annually = 12.5%
Total money lost = 60 +12.5 = 72.5%

Money gained = 30% (new deal) - 20% (original offer) = 10% X 5 (years duration of contract) = 50%

Net result = 50 - 72.5 = -22.5%

So for a union negotiator to hold out for three years to gain an extra 10% in salary actually costs you 22.5% of your annual salary. The longer the time between the originally rejected offer and the actual settlement, the bigger this number becomes. So for us right now, given our conditions, this 22.5%  is as LOW as it can be.

This is sobering, but the political ramifications are even worse. ALPA leaders know this increasing loss to be the case and so to skew the numbers favoring a larger raise/signing bonus/equity stake etc must be achieved. So ALPA's position actually must move further away from an acceptable deal to management, rather than get closer. As ALPA's intial position was rejected, a more expensive position will of course, be rejected by management too. Management is put in a position where the option to run 2 separate airlines, under current contracts, becomes more and more inviting, more and more logical, more and more fiscally responsible. And this is what will happen. This is what is happening. I fully expect to retire in five years under the current contract having seen no raise or improvement of benefits of any kind because of this position that your union has taken. A position YOU are supporting. Your handlers have turned it into a USAir situation, and will continue to blindly accuse the company of being the problem.

This is what "Just voting No!" costs. So the next time you hear it, think. Even better, direct them to this blog and have them check the math.

aftershock

Six years ago the Wiedemer brothers accurately predicted the crash of 2008 and the end of the housing bubble. The response to this financial crisis by our government has caused ancilliary issues; far greater and more far reaching. The "quantitative easing" (or rampant money printing) has served to ease the pain temporarily, but at a cost of a far greater problem in years to come.
Why do you care? How does this affect you?
These same writers now have a blueprint for the coming inflation. Along with this inflation, this devaluation of our currency, we will see economic contraction (as we are already seeing) and that will directly affect you. Jobs will be lost. Companies will fail. It could easily be your company, or your job.
The survivors of this crisis are the ones who position themselves early, so that the inevitable hardships can be dealt with in a reasonable fashion. Our economy IS shrinking in real terms. If it was rolling along OK American Airlines would not have gone bust. Sure, you can blame the arrogance of the pilots in insisting that their A fund was preserved (and it DID indeed create an unlevel playing field between them and United/Delta), but in a booming economy even that would have been manageable. So the first rumblings of imminent hardship are being heard if you pay attention.
So what?
We are at the best time, the most advantageous point, right now, to cut a deal. The longer we wait, the more valid reasons management will have to give us NOTHING. The longer we wait, the more numerous replacement pilots become available should we decide to execute a strike. Our position is being progressiveley undermined as the clock ticks. Urge your representatives to direct the negotiating committee to strike the best deal they can (and it MUST include competitively priced RJs because many of us will be bounced back to those in the coming contraction) RIGHT NOW.
We are coming up on two years of this self serving fiasco called "negotiations". The Treaty of Versailles took six weeks, and that was nations negotiating a lasting peace, not workers and managers trying to figure out how to make money.
Management has little incentive to rush things. Their position only gets stronger. The mediator has zero incentive. YOUR NEGOTIATING COMMITTEE is th only possible vehicle for expediting this process.
IF they truly represent your interests, then they should do that, NOW!