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May 19, 2006

Sky-High negotiations

By and

You have to hand it to the National Air Traffic Controllers Association: Few groups have fought harder get an exorbitant pay increase on the taxpayers' dime.

It began in September 2005, when the existing contract between the Federal Aviation Administration and the controllers expired and discussions over its replacement got underway. With the average controller compensation now at $166,000 per year, the FAA hoped to slow the growth of any future costs.

But after eight months of fruitless negotiations with the controllers' union, the FAA declared an impasse and, as the law requires, sent its final wage-and-benefit offer to Congress for review. Unless Congress disapproves the contract within 60 days, FAA's final offer will be the compensation package governing controller salaries for the next five years.

Under the FAA's final offer, total controller compensation would rise to $187,000, in contrast to the more than $200,000 the controllers had been demanding. As a result of this and other differences in the contracts, taxpayers would save $600 million if the FAA's contract were adopted.

Incredibly, a bipartisan majority in the House of Representatives is siding with the controllers in their effort to force taxpayers to provide them with one of the most generous pay and benefit packages available to any group of American workers. Led by Reps. Steven LaTourette (R-Ohio) and Jerry Costello (D-Ill.), these members want to force the issue to a vote on the House floor through an obscure legislative device called a "discharge petition." They hope to force the issue into arbitration to give the controllers another chance to get their pay package closer to the $200,000 they've been demanding.

Since 1996, controllers have been one of the few groups of federal employees empowered to negotiate pay, benefits and work rules with the government. Base pay for the nation's 14,500 air-traffic controllers leaped 75 percent in the seven years following 1996. In 2005, the average controller made $128,000 per year in cash compensation -- more than $166,000 when benefits are included. And 1,300 veteran controllers made more than $200,000 per year.

Now, their contract is up, and they want more. Lots more. The union seeks a contract that would cost taxpayers and the beleaguered airline industry an extra $2 billion over the life of the contract. It featured an 18 percent increase that would take average cash compensation to $151,000 and total compensation to more than $200,000 by the last year of the contract.

It's stressful work, the controllers say. Besides, the importance of ensuring the safety of millions of passengers justifies their demands for such generous compensation. Indeed, compensation should be commensurate with the skills and effort expected of workers.

But the question is: Are air-traffic controllers, at $128,000 cash pay per year, truly that much more critical to our safety than fire chiefs ($79,000), airline mechanics ($45,000), police officers ($45,000), flight attendants ($43,000) or firefighters ($38,000)?

Believing that the big spenders in Congress would bail them out, the controllers' union dragged its feet during the eight months of negotiation and forced the impasse. But what they failed to consider was the unwillingness of the House leadership to cave into excessive wage demands and its view that the FAA's final offer was more than generous. Under that offer, cash pay would rise to an average of $140,000 over the five-year contract, total compensation would climb to $187,000 and a new pay tier would be created for new hires.

With the June 5 deadline looming, the House leadership is certain to muster the will to turn back the discharge-petition plan. And with a new contract in place, Congress should then begin to work with the FAA to set about copying the myriad other nations that have improved air-traffic control service and reduced costs by privatizing and/or commercializing all or part of the industry. America no longer can afford for its aviation-control system to operate in the warm and generous embrace of a government monopoly.

The FAA already has had some success with privatizing operations. It privatized 187 "Level 1" towers -- those that handle the least traffic -- before the 1998 contract and saved $250,000 per tower per year. The remaining 71 "Level 1" towers could be privatized as well, with savings estimated at $881,000 per tower per year. That's $63 million a year saved and nothing lost in terms of service.

Air-traffic controllers have overplayed their hand before in negotiations with the government. Ronald Reagan, the only former union head ever to serve as president, famously busted PATCO soon after taking office. This time around, government won't have to start from scratch if an agreement can't be reached. It's time the unions and their allies in Congress realize this.

Ronald Utt is the Herbert and Joyce Morgan Senior Research Fellow in the Roe Institute for Economic Policy Studies.

First appeared in the Knight-Ridder Tribune wire

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