I can't figure out what all the uproar is about against Southwest. From what I am reading they gave their employees a choice on if they all wanted to take a paycut OR if they wanted to have furloughs/cuts for some employees. That seems like an entirely reasonable thing to do. They are giving a choice instead of making it for them. There is no option for everyone to keep their jobs and keep their same paychecks at this point. Do people not understand how businesses work?

Personally, I see both sides, but I think the workers should go with the furloughs/cuts. Taking a wage decrease is going to be detrimental to those who would stay in the long run. It has a compounding effect over someone's career. Best to get paid the same now, and possibly have to do someone else's work too then to have your salary 10 years from now be far less than it would have been.

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C(-)ris
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Outrage may have something to do with executive compensation packages not being included in the cuts? In most cases, once a successful wage rip and tear goes through it's followed by significant bonuses for the upper echelon.

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RgrF
Outrage may have something to do with executive compensation packages not being included in the cuts? In most cases, once a successful wage rip and tear goes through it's followed by significant bonuses for the upper echelon.

SWA has 61,000 employees, if their entire leadership team took a 25% pay cut it would mean an extra $3.84 per paycheck, pre tax for every employee. No one is even going to notice that and it certainly isn't going to save any jobs.

Unless you are talking about a very small business, executive salaries don't matter much in the grand scheme of finances.

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C(-)ris
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C(-)ris
SWA has 61,000 employees, if their entire leadership team took a 25% pay cut it would mean an extra $3.84 per paycheck, pre tax for every employee. No one is even going to notice that and it certainly isn't going to save any jobs.

It comes to something like $87 per year per employee.

But that's not the point.

Executives should share the pain.

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Exactly, leadership by example.

Haven't seen it in the news, but I just found that Southwest executives, when approaching the labor unions to ask for 10% pay cuts from pilots and in-flight employees told them that the CEO will forgo his salary through the end of 2021 and all senior executives will take a 20% pay cut.

They also promised to roll back any concessions should Congress give them a bailout.

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Leaders eat last.

SWA's executives aren't being leaders.

How much can they expect from their employees when the pandemic is over?

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anonymouse1
Leaders eat last.

SWA's executives aren't being leaders.

How much can they expect from their employees when the pandemic is over?

Even if the execs all took zero salary, that would only save 100 jobs out of 61,000. It makes no meaningful difference. What are they supposed to do? You can’t bleed cash year after year. You can’t change your fixed asset or operating costs. In almost every business salaries are 80 to 90% of expenses. That is the only place to cut when going gets tough.

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C(-)ris
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You’re failing to understand the implications of not leading by example. The financial costs of this are tangible and significant. I’ve seen this first hand on several occasions. When your employees don’t have confidence in their leadership, moral goes down and as a result performance will suffer, costing the company money.

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C(-)ris

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anonymouse1
Leaders eat last.

SWA's executives aren't being leaders.

How much can they expect from their employees when the pandemic is over?

Even if the execs all took zero salary, that would only save 100 jobs out of 61,000. It makes no meaningful difference.

It would make a hell of a difference to those 100 employees and their families!

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C(-)ris
Even if the execs all took zero salary, that would only save 100 jobs out of 61,000. It makes no meaningful difference.

I think the key issue here is that the arguers here have conflated pragmatism with fairness.

Your argument makes sense from a pragmatism stance, but that position does not require fairness.

Others' arguments make sense from a fairness stance, but that position does not require pragmatism.

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rj
AKA
Vreemac, Moth of the Future

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rjmacs

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C(-)ris
Even if the execs all took zero salary, that would only save 100 jobs out of 61,000. It makes no meaningful difference.

I think the key issue here is that the arguers here have conflated pragmatism with fairness.

Your argument makes sense from a pragmatism stance, but that position does not require fairness.

Others' arguments make sense from a fairness stance, but that position does not require pragmatism.

Right on. Though it might be argued that the execs taking cuts to their salaries could not only be fair but also pragmatic. There's no reason that the cuts to their salaries need to be applied toward helping the workers. The exec cuts could be added to wage cuts of the workers to help save the company - that would be pragmatic - AND it would still be fair to the workers.

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e pluribus unum



Edited 2 time(s). Last edit at 10/18/2020 03:45PM by Ted King.

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Ted King

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rjmacs

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C(-)ris
Even if the execs all took zero salary, that would only save 100 jobs out of 61,000. It makes no meaningful difference.

I think the key issue here is that the arguers here have conflated pragmatism with fairness.

Your argument makes sense from a pragmatism stance, but that position does not require fairness.

Others' arguments make sense from a fairness stance, but that position does not require pragmatism.

Right on. Though it might be argued that the execs taking cuts to their salaries could not only be fair but also pragmatic. There's no reason that the cuts to their salaries need to be applied toward helping the workers. The exec cuts could be added to wage cuts of the workers to help save the company - that would be pragmatic - AND it would still be fair to the workers.

True. And the very prominence of executive pay in the workers' complaints (dissatisfaction that may ultimately affect Southwest's operations/business) suggests that in this case, fairness has become a pragmatic issue, which tips the argument a bit against a purely pragmatic stance.

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rj
AKA
Vreemac, Moth of the Future




Edited 1 time(s). Last edit at 10/18/2020 03:55PM by rjmacs.

One of the prompts that led me to mention executive compensation was a recent story out of Oz. Seems Quantas primary competitor, Virgin Australia, has been taken over by Bain Capital and both the gov and employees are fearful of it being stripped down and turned into a budget carrier in the short term before being left for dead.

You may remember Bain from the Romney years, it a premier "vulture capital" outfit that knows how to strip things to the bone. If I were a Virgin employee I'd be concerned about my pension prospects.