Word: nonunionized
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...Food and Commercial Workers International Union. Anderson can see the damage among his own battered members. The average hourly wages for 110,000 workers have been cut from $10.69 or more to around $8. Some pork and beef workers have been thrown out of work altogether and replaced by nonunion employees who earn as little as $5.50 per hour...
...competition, the average price of shipping a truckload of freight is 25% to 30% lower than it was four years ago. The price squeeze has been tough on unionized carriers, which have laid off one-third of the Teamsters members employed in the industry. Meanwhile, low-cost nonunion trucking operations are mushrooming. Overnite Transportation, a nonunion company based in Richmond, has expanded its network from 21 states to 31 since deregulation. Its revenues rose by 25% between 1979 and 1982, despite the recession...
...trim costs, Greyhound asked that unionized drivers take a 9.5% pay cut and thereby provoked a strike that is now in its second month. Employees rejected a new wage offer last week, and Greyhound said it would continue its effort, started three weeks ago, to rebuild service with nonunion drivers...
Lorenzo claims that Continental's wage rates were more than just burdensome. His high-cost airline simply could not compete with the low-cost carriers. An unforeseen consequence of deregulation had given the new, nonunion airlines an important cost advantage over the old ones, and Lorenzo believed that he had no choice but to take drastic steps to reduce Continental's costs. Says he: "Some very, very brutal things have happened to this industry. I have the job of trying to steer through some stormy waters." But if Continental is successful in breaking its union contracts through bankruptcy...
...fare wars have ultimately been caused by the twin impact of deregulation, which brought price competition to the airlines and allowed nonunion upstarts to flourish, and the recession, which caused traffic to shrink. Result: too many seats chasing too few passengers. No-frills carriers like People Express (see box) and Southwest Airlines are thriving on the competition by holding down costs, but some other small airlines are being squeezed. Air Florida, which had helped spark an earlier round of discounting, lost $64 million in the first nine months of 1982 after Delta and Eastern began matching the fares...