Waiting for Take-Off

WAITINGFOR

TAKE-OFF

& MSP Depend on

How the Futures of

Each Other.

Minnesotas east African Communities

This report was authored by Eden Yosief, Social Justice Research Fellow with the Center for Popular Democracy. We also wish to acknowledge Connie Razza and Aditi Sen for providing their expertise in the development of this report.

The Center for Popular Democracy works to create equity, opportunity, and a dynamic democracy in partnership with high-impact base-building organizations, organizing alliances, and progressive

unions. CPD strengthens our collective capacity to envision and win an innovative pro-worker, pro-immigrant, racial and economic justice agenda.

ABOUT THE CENTER FOR POPULAR DEMOCRACY

www.populardemocracy.org @popdemoc

WAITING FOR TAKE-OFF

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INTRODUCTION

OVERVIEW

Poverty wages. Many service workers at MSP earn between $8.00 and $8.50. Assuming 40 hours per week at $8.50 an hour, a worker would earn just $17,680 per year, while the federal poverty line for a family for 4 is $24,250.8 However, many low-wage airport workers do not get full time hours, making it even more difficult to make ends meet.

Workforce instability. Low pay and no benefits (no health insurance, holidays or vacation) result in high turnover, additional training costs, and more experienced workers carrying more weight of an ever-changing workforce, at the same rate of pay as new workers.

Inadequate staffing levels. Contractors often have an insufficient number of staff to do the job right, due to high turnover and unpredictable scheduling. As a result, employees are overworked and at a greater

risk for injury. Disabled passengers are not given the assistance they are entitled to by law, flights are delayed, and customer satisfaction declines.

MSP can take steps to address these declining wages and improve labor standards, by adopting a prevailing wage requirement for service contract workers at MSP, and responsible contractor policy that prevents contractors who violate labor laws from operating at the airport.

This report explores how degradation of airport jobs affects Minnesotans, particularly of East African descent, and what MSP and surrounding communities can do to ensure the health and safety of our airport, our communities and the greater Twin Cities area.

Minneapolis - St. Paul International Airport (MSP) consistently ranks among the top airports in the United States.1 As the largest and busiest airport in the upper midwest, MSP serves as an economic driver of the entire region.2

Yet, over the years, the quality of jobs at MSP has been declining, due to the national trend of airlines contracting critical service jobs to the lowest bidder. Today, even the highest paid outsourced workers in these ground-based airport jobs earn less in real terms than the average directly-hired worker in the same job a decade ago.3 Jobs that once provided solid livings -- support workers like baggage handlers, cabin cleaners and cart drivers -- are now characterized by low-wages, high turnover, little access to benefits and diminished power to negotiate employment conditions.

Direct employment at airlines fell by 160,000 workers, a quarter of the workforce, between 2001 and 2011. Over the same period, passenger traffic among major U.S. airlines grew by more than 30 million, an increase of 6 percent.4

The lowest paying airport jobs are often mostly performed by people of color.5 In the Twin Cities, East African immigrants and descendants

dominate the passenger assistance and service jobs, where they face:

OVERVIEW


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EROSION OF JOBS AND WAGES AT MSPMinneapolis - St. Paul International Airport has earned countless praise over the years as one of the best airports in North America. MSP is a publicly-owned entity and an economic engine vital to the health of the local, regional and national economies.


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EROSION OF JOBS & WAGES AT MSPThe Metropolitan Airports Commission (MAC) has a vision to provide the best airport experience in North America.9 By many measures, it is succeeding.

Travel and Leisure Magazine recently selected MSP as the Best Airport in America.10

The US Department of Transportation lists MSP as having the 3rd best on-time departure rate.11

Travel Leaders Group ranked MSP 4th best in the nation for business travelers, and 2nd best in several other categories.12

A recent InterVISTAS Consulting report calculated that the airport injects $10 billion a year into the area economy through jobs, tourism, and tax revenue.13

In addition to driving regional economic development, other central tenets of the MACs mission include ensuring that the airport meets the needs of the community, provides a safe and secure location, and is easily accessible for all.14

Airport jobs used to be good, dependable jobs when service workers were direct employees of the airlines they serviced and had benefits like health insurance, paid sick time and vacation. They enjoyed airline-employee perks and a comfortable wage to support a family. They had steady schedules, sufficient hours, reasonable workloads and respect on the job.

But times have changed, and so has MSP. The service workers who make the airports success possible-- who ensure the airport is clean, accessible and efficient--do not benefit from their hard work.

Today, even the highest paid outsourced workers in these ground-based airport jobs earn less in real terms than the average directly-hired worker in the same job a decade ago.3


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In recent years, airlines have outsourced much of their work, including passenger service responsibilities such as cabin cleaning, cart driving, and wheelchair services. Between 2002 and 2012, airline contracting of baggage handler jobs more than tripled at US airports, from 25% to 84%.15 At the same time, average hourly real wages across both directly-hired and contracted workers declined by 45%, from over $19 an hour to $10.60.16 The number of contracted vehicle and equipment cleaning jobs doubled nationwide, from 40% to 84%, while wages fell from the equivalent of over $15 an hour to $11.40, a 25% drop.17

percentage of outsourced airline workers

Course Correction: Reversing Wage Erosion to Restore Good Jobs at American Airports

EROSION OF JOBS & WAGES AT MSP


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Companies compete to be the lowest bidder, fostering a race to the bottom which impedes equitable economic development and increases pressure to undercut the high standards MSP seeks to maintain. The general public invests heavily to ensure that airports are efficient, safe and well-connected to the cities they serve. Corporations operating at the airport must also invest in their workers to maintain these high standards, yet with many workers earning minimum wage without benefits, there is little incentive to stay in the job long term.

Minnesota communities are making these investments while significant numbers of airport workers and their families are living in or near poverty and must rely on safety net programs to make ends meet.

MSP employs more East African workers than any other single place of employment in all of Minnesota.6

Immigrants from Eritrea, Ethiopia and Somalia account for at least 2,500 active badge holders at MSP, more than half of the foreign-born population.18 Over the past 15 years, an increasing number of East Africans have been taking employment at the Twin Cities airport.

average airport worker wagesin dollars

Course Correction: Reversing Wage Erosion to Restore Good Jobs at American Airports


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The foreign-born population of Minnesota has tripled since 1990 and East African communities have a significant presence in the culture of the state.20 More Somalis now call Minnesota home than any other place in North America.21 According to US census figures, more than 20,000 Somalis live in Minnesota, while some estimates exceed 50,000. The number of Ethiopian immigrants in Minnesota has increased more than 10 times since 2000, and thousands more Eritreans have settled in Minnesota.22

east africansin the twin cities


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There is no single location in the state that employs more East Africans than Minneapolis-St. Paul International Airport. The vast majority of East Africans at MSP are in low-wage service jobs. East Africans have been keeping the airports vital services running for decades. Turnover is high, with few workers who have been working there more than a few years, but those who have stayed have seen their wages fall drastically overtime. This erosion of wages has a significant impact on the communities in which airport workers live. Poverty wages at the airport hurt all communities, and East African communities bear one of the heaviest burdens of low quality jobs at MSP, which perpetuates rather than alleviates poverty.

EAST AFRICANS IN THE TWIN CITIES

2%

16%

39%

43%

COUNTRIES OF ORIGIN OF FOREIGN-BORN MSP WORKERS

Ethiopia

Somalia

Other

Eritrea

MSP Airport Badge Holders document acquired through the Minnesota Government Data Practices Act request to the MSP Airport Police Department


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The dichotomy between the airports high marks on performance and its low-quality working conditions contributes to the stark disparities in the region at large. In the past year alone, Minnesota --Minneapolis in particular-- has topped list after trending list as one of the healthiest, most educated, and economically vibrant states in the nation.22 Minnesota was ranked 2nd best state to live in overall, but it is ranked the 2nd worst in livability for African Americans.23 The high school graduation rate of black students is 57%, when overall students are graduating at a rate of 78%. 24

A closer looks at economics of East African immigrant communities further highlights these massive disparities. Not only are median household incomes dramatically lower for East African communities than the rest of the state, theyve also fallen significantly over time.

Individuals below the federal poverty level by racial and ethnic group, Minnesota, 1989-2013 Minnesota Compass.

ANNUAL MEDIAN HOUSEHOLDINCOME FOR MN COMMUNITIES

POVERTY RATES IN MINNESOTA COMMUNITIES



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The poverty rate in the Somali community is astonishingly high, with 63% living below the federal poverty line.25 Between 2000 and 2012, the percentage of Ethiopians in poverty increased from 18 percent to 24 percent, triple the growth among white Minnesotans.26

Individuals below the federal poverty level by racial and ethnic group Minnesota, 1989-2013 Minnesota Compass.

POVERTY RATES IN MINNESOTA COMMUNITIES


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OVERVIEW

The problems facing low-wage workers at MSP extend beyond insufficient wages. They also note that with no minimum guaranteed hours each week, short shifts, on-call days -- for which they must keep themselves available in case they get called in -- and being sent home mid-shift are practices that sacrifice their economic security in favor of the flexibility of the corporations that employ them.

One Ethiopian worker earning $8 an hour said shes been sent home after just an hour or two of work when her supervisor decided they no longer needed her services that day: If I work two hours, including transportation time, I pay $9 for daycare plus $4 for bus fare, I made less than $4 that day...and thats before taxes. On those days, her job has cost rather than earned her money.27

The flexible scheduling that airport contractors practice results in high turnover and instability. Workers report that without a steady schedule, they are unable to set doctors appointments, remain actively involved in their childrens education, maintain or get second jobs to supplement their income, or further their own education. They have neither certainty about what hours they need to hold for their airport job nor dependable income because their hours at MSP fluctuate significantly and workers get their schedules on short notice.

Its difficult to collect reliable

information of the Eritrean community

in Minnesota, a common obstacle

when looking into the plight

of marginalized communities.

To compensate, Eritrean community members, leaders and airport worker

interviews were used, and they have echoed

similar concerns and issues to those

affecting Somali and Ethiopian communities.

I came to this country with a plan to go to school. Many of us were educated back home, but they wont accept a degree from Addis Ababa University here. I want make a better life for my kids, I want to go to school and be a nurse but I cant do that with all of the bills we must pay and my responsibilities to the children. Its impossible to live like this. Alem Hurissa, wife of an Air Serv Employee



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Wages have fallen at many jobs at MSP. For example, I worked as a Lavatory and Water Driver, draining and refilling the toilets on Delta planes in 2008 making $12.50 an hour. In 2014, when a new contractor won the contract they were offering $8 an hour for the same job. During that time everything has gotten more expensive, yet wages are going down. It makes it impossible to advance in life

- Ibrahim Mohamed, Cart Driver for AirServ and Commissioner of MAC


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Workers reported being unable to pay their bills on just their salary. At $8.50, a full-time worker would earn $17,680 per year, $14,264 less than is needed to meet the MN cost of living.28

This demonstrates that a worker cannot afford to live on the low-wages some contractors are paying at MSP. Accounting for average rent, transportation and food costs in Minnesota, low-wage workers fall short, and that is before factoring in child care, clothing, medical, utilities and other expenses.

In contrast, CEO of Delta, Richard Andersons compensation package for 2013 totaled over $14 million, which comes to more than $6,900 per hour. He made more in three hours than a full-time cabin cleaner makes in an entire year.29


Yearly Cost ofLiving in MN

Full-time workerearning $8.50/hr

Minnesota Cost of Living Study, February 1, 2015


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Every year, thousands of East Africans immigrate to the United States for economic opportunities and the chance at a better life, yet MSP workers have explained how things have gotten worse for them since their arrival. In Ethiopia, for example, a job at the airport guarantees one a comfortable life and benefits. This has caused strife between families when workers have to explain to a loved one living in Ethiopia that they are scraping by and cannot send them money while working at an airport in the USA. Many families in East Africa and countries around the world depend on the money they receive from relatives living in the US and Europe for survival. One worker stated that she had not spoken to her family in months because they do not believe she is earning so little, and that she is not sending money to them for other reasons.

Despite the difficulties scheduling, more than a third of surveyed workers at MSP reported having to work two jobs, due to low pay.30 Others rely on public assistance to help them meet their living expenses. However, the significant fluctuations in schedules complicates their ability to access public assistance. For example, if someone works 100 hours one month, and 80 hours the following month, they should be allotted more benefits for the second month, but they have to prove their income changed. Although their eligibility for the appropriate level of assistance depends on their collecting and presenting proof of income, their irregular schedules demand this updating too frequently and create obstacles to planning the time to go to the appropriate government office or offices.

A $15 minimum wage at the airport would pull thousands of families out of poverty, decrease the number of households receiving public assistance benefits, and begin to move Minnesota toward greater racial equity. The effects this wage increase could have on families is immense. By some estimates, as many as 20% of Ethiopians in the workforce are employed at the airport at any point in time.7 Raising wages gives workers the opportunity to take control of their own lives, acquire and generate wealth within their communities and create a better future for East African communities to thrive.

Minnesota taxpayers have invested significant amounts in the development and expansion of MSP. MACs mission is to Provide and maintain airport facilities and services that meet the needs of the community. The MAC now has the opportunity to make good on that public investment and advance its mission.

If the average service worker is making $8.50, a wage increase to $15 would: increase take-home pay $10,000 for a full-time worker. bring $25 million in disposable income to the East African communities and more than $8 million in income taxes.31 generate $1.1 million in annual sales tax revenue from airport workers alone.32 stimulate an additional $14 million in economic activity in local communities.33


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conclusionThe MAC has at its disposal the tools and the authority to reverse the decline of wages and working conditions at MSP. In fact, recent experience shows the capacity of the MAC to take the lead in improving working standards for employees throughout the airport, even employees not directly under its regulatory authority. In the Fall of 2014, the MAC passed a Paid Leave Policy for workers employed by 21 different subcontractors that provide services for the flying public, raising standards for an estimated 2,000 employees. Soon afterwards, Delta Airlines extended a similar Paid Leave Program to its employees, ultimately impacting thousands more workers at MSP who are not under the regulatory authority of the MAC. In short, the MAC exercised leadership to elevate standards for workers throughout the airport.


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CONCLUSION

To address the issues of poverty, low wages, and unsafe and unfair working conditions as detailed in this report, we recommend:

The Metropolitan Airports Commission should exercise its leadership to establish a living wage requirement of $15 an hour to raise standards and improve the lives of workers throughout the airport.

The MAC should adopt a prevailing wage requirement for service contract workers at MSP to establish a stable, reliable workforce that delivers high quality services to the flying public, including passengers with disabilities, and to ensure that workers are compensated fairly according to the real value of the services they perform.

The MAC should adopt a responsible contractor policy that prevents contractors who violate wage and hour laws, health and safety rules, airport security regulations, and other important legal protections from operating at MSP.

Setting labor standards could reverse the decline in wages that airport workers have experienced over the years and create a better functioning airport. Minnesotans have a direct interest in requiring that their airports are not only safe and reliable, but also good employers. It is imperative to diminishing the disparities gaps in the state that we highlight existing systems that contribute to those disparities and focus on solutions that work for everyone.

1. Halter, Nick. Delta CEO: MSP is worlds best-run airport Minneapolis/St. Paul Business Journal. September 23, 2014. Accessed February 24, 2015.2. Airport Traffic Reports. Airports Council International - North America - The Voice of Airports. Accessed February 23, 2015. http://www.aci-na.org/content/airport-traffic-reports.

3. Miranda Dietz, Peter Hall, and Ken Jacobs. Course Correction: Reversing Wage Erosion to Restore Good Jobs at American Airports. October 2013.4. Ibid.5. A Missed Opportunity: How the BWI Airport Concessions Program Fails Baltimores African American Community United Here! Accessed January 23, 2015.6. This number was determined by identifying the largest places of employment and the largest employers in the State of Minnesota. Those numbers were then cross-referenced with self-reported racial diversity rates of employment of each employer or place of employment.7. Foreign born population Minnesota, 2000-2012 Minnesota Compass. Accessed February 7, 2015.8. 2015 Poverty Guidelines for the 48 Contiguous States and the District of Columbia U.S. Department of Health and Human Services.9. The Metropolitan Airports Commission 2012-2016 Strategic Plan, p.8.10. Minneapolis-St. Paul International Airport ranks No. 1 in magazine survey, Pioneer Press, Brady Gervais, April 20, 2012.11. MSP Airport Ranks 3rd For On-Time Departures,Twin Cities Business, Rebecca Omastiak, May 6, 2013.12. Survey Reveals Preferred Domestic Airports for Connections, Amenities, Dining, Kids and More, Travel Leaders Group, January 29, 2013.13. Minneapolis-St. Paul International Airport Economic Impact Study, InterVISTAS Consulting LLC, March 2013, p. 4.14. The Metropolitan Airports Commission 2012-2016 Strategic Plan, p. 9.15. Miranda Dietz, Peter Hall, and Ken Jacobs. Course Correction: Reversing Wage Erosion to Restore Good Jobs at American Airports. October 2013.16. Ibid. 17. Ibid.18. MSP Airport Badge Holders document acquired through the Minnesota Government Data Practices Act request to the MSP Airport Police Department19. Foreign born population Minnesota, 2000-2012 Minnesota Compass. Accessed February 7, 2015.


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endnotes

20. NEW AMERICANS IN THE NORTH STAR STATE: The Political and Economic Power of Immigrants, Latinos, and Asians in Minnesota Immigration Policy Center. October 15, 2009. Accessed February 28.21. Foreign born population Minnesota, 2000-2012 Minnesota Compass. Accessed February 7, 2015. 22. Thompson, Derek. The Miracle of Minneapolis The Atlantic. February 16, 2015. Accessed February 25, 2015. 23. Nickrand, Jessica. Minneapoliss White Lie The Atlantic. February 21, 2015. Accessed Feb 25, 2015.24. Allen, Ashley C., Thomas C. Frohlich, Alexander E.M. Hess, Alexander Kent, Douglas A. McIntyre. The Worst States for Black Americans 24/7 Wall St.. December 9, 2014.25. Individuals below the federal poverty level by racial and ethnic group Minnesota, 1989-2013 Minnesota Compass. Accessed February 7, 2015. 26. Ibid. 27. Ethiopian airport worker interview, February 5, 2015.28. Clay, John, Steve Hine, Amanda, Rohrer. Minnesota Cost of Living Study 2015 Annual Report. February 1, 2015. Accessed February 28, 2015. 29. Delta CEO Richard Andersons total comp rises to $14.4 million Atlanta Business Chronicle. April 30, 2014. 30. Bring Dignity Back to MSP Service Employees International Union Local 26.31. Bring Dignity Back to MSP Service Employees International Union Local 26.31. Assuming all 2,500 badged airport workers wages increased from $8.50 to $15 per hour, or $31,200 annually, at full-time. 32. As of April 2015, sales tax are paid to Minnesota, Hennepin County, City of Minneapolis and Transit Improvement. Their respective rates are 6.875%, 0.15%, 0.5% and 0.25%, equalling 7.775%.33. This study assumes a spending multiplier of .56, from Catherine Reutschlins 2012 study of retail workers. 14 This multiplier is applied to workers take home pay, or the remaining after subtracting a total of 6.2% for Social Security, 1.45% for Medicare, 5.35% for Minnesota income tax, and an assumed 12.7% marginal Federal tax rate according to their income. Under the $15 proposal, we estimate total take home pay to come to $25 million, and net economic activity to be .56 times that figure, or 14 million.

Cover Photo Attribute: Goodbye Minneapolis by A Gude (http://bit.ly/1IGGgWK) is licensed under a Creative Commons Attribution 4.0 International License.


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Graphic Design by: [email protected]

Waiting for Take-Off

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