Most Seattle airport workers remain uncovered by minimum wage hike

Most workers at Seattle-Tacoma’s International Airport cannot receive the $15 minimum wage that voters approved last fall. Watch Paul Solman’s Making Sen$e report above.

Last November, voters in SeaTac, Wash., home of the Seattle-Tacoma International Airport, approved a ballot initiative to increase the minimum wage to $15. But the victory wasn’t instantaneous. Only after a recount did King County election officials certify a 77-vote margin in favor of Proposition 1 — three weeks after Election Day. But now, nearly five months later, the fate of SeaTac’s minimum wage hike still hangs in the balance.

Alaska Airlines, the main opponent of the $15 minimum wage, immediately filed a lawsuit in county court charging that the city couldn’t dictate what airport workers who happen to work within city limits can earn. Higher wages disappeared for about 4,700 airport workers.

With high-end retailers and wealthy travelers passing through the airport, “It’s like a mini Bangladesh over there right now,” Proposition 1 spokeswoman Heather Weiner tells NewsHour in Thursday’s Making Sen$e segment.

Workers in larger hotels and parking lots surrounding the airport got their raise on Jan. 1, but approximately 5,000 workers on airport property are waiting for the state supreme court’s ruling on the appeal to learn if they will ever get their hourly raise.

Things weren’t always this way. A decade ago, unionized Alaska Airlines ramp workers received $20 an hour. (That’s double $10.10 minimum wage President Obama has proposed.)

But in 2005, as they prepared to start their shifts, 472 baggage handlers received a startling phone message: their jobs has been outsourced to Menzies Aviation, a contract firm. At the time, Alaska Airlines estimated the move would save them upwards of $13 million a year.

Weiner is quick to point out to us, Alaska Airlines’ profits continue to boom. In 2013, net profits for Alaska Air Group were up 60 percent over the previous year, to about $500 million.

Alaska Airlines declined our interview request, but sent along this written statement from spokesperson Bobbie Egan:

Alaska is profitable now, but the past decade has been the most challenging in the history of airlines. The industry’s economics for legacy carriers like Alaska were changing. If we couldn’t lower our costs in order to offer low fares, we’d go out of business. Many other airlines were forced into bankruptcy or consolidation, however, Alaska avoided those outcomes even though we lost nearly $450 million. In order to survive, we temporarily froze wages and offered early retirements to some employees. Externally, we turned to airport-based contractors that work for multiple airlines and provide economies of scale. Alaska already contracted with vendors to handle ground services at nearly three-quarters of the airports we served (41 of 56 cities). We’d been negotiating with the IAM [International Association of Machinists] for 20 months and wanted to reach an agreement. Unfortunately, we were not able to do so and the difficult decision was made to retain Menzies Aviation to handle the ramp
in Seattle.

Alaska supports fair pay and benefits for all workers and we respect the job every worker does. While we can’t dictate the labor relations practices of our business partners, we do strive to work closely with them on pay rates that reflect the job market, such as our relationship with Menzies Aviation. In October 2013, Menzies agreed to raise the starting pay for a ramp agent at Sea-Tac Airport by 14% from $9.50 to $10.88 an hour. There’s a raise after six months, another raise after one year and at the end of two years the pay goes up to nearly $12 an hour.

None of Alaska’s business partners or contractors would speak to Making Sen$e either.

But it’s not just baggage handlers who aren’t earning the higher wage. Frequent fliers will be familiar with many of the retailers whose operating companies don’t have to pay the $15-an-hour minimum under the judge’s ruling. Employees of HMS Host Restaurants, for example, which operates Starbucks, or Latrelle’s Concessions, which operates Wendy’s, aren’t covered by Proposition 1. Neither are employees of Hudson’s News Group Retailers, McDonald’s or the Body Shop. The same goes for workers at numerous rental car agencies and subcontractors like Hertz, Avis Budget Group and Enterprise.

Proposition 1 would also grant these food preparers and retailers paid sick leave, and as Making Sen$e explored last fall, that’s a benefit that’s probably good for travelers too.