Fascinating criticism of a recent Department of Labor’s 2004 National Compensation Survey of wages and income (by career) by 2 airline pilots.

It calls into question the methodology and underlying presumptions of the Labor Dept. and by extension, the BLS:

We’re Earning More? You Could’ve
Fooled Us
September 26, 2005; Page A19

Your article "Wage
Winners and Losers: Most Paychecks Fell in 2004 but U.S. Survey Finds Pilots,
Doctors Came Out Ahead
" (Marketplace, Sept. 13) did a grave disservice to
the thousands of pilots who have sacrificed billions in salary concessions and
billions in lost pensions, not to mention the thousands of pilots currently
furloughed and those who have lost their jobs and benefits completely.

The Air Line Pilots Association has serious questions concerning
the Bureau of Labor Statistics data and how the study was conducted. These
questions remain unresolved despite repeated calls to the agency. As we told
your reporter: "We’re unclear how the government could have come up with numbers
that show an increase. This study flies in the face of the reality that pilots
are working more hours while taking substantial pay cuts, losing some or all of
their pensions and paying more for health care."

Capt. Duane E. Woerth
President
Air Line Pilots
Association
Washington

On behalf of the Allied Pilots Association representing the
13,000 pilots of American Airlines, I was surprised to read in your Sept. 13
edition that pilot pay has supposedly increased 15.6% from 2003. You also quoted
Department of Labor statistics that indicate pilots work an average of 20.5
hours per week. In April 2003, our pilots agreed to a 23% across-the-board pay
cut to help American Airlines remain solvent. Since the Sept. 11, 2001,
terrorist attacks, nearly 3,000 of our pilots have taken a 100% pay cut as a
result of being furloughed.

As for how much our pilots work, Federal Aviation Administration
regulations limit airline pilots to 1,000 actual flying hours per year. To amass
that much flying time, our pilots typically spend between 2,500 and 2,800 hours
away from home, with many of those hours devoted to essential pre- and
post-flight duties.

Our experience at American Airlines, the nation’s largest
scheduled passenger carrier, is that our pilots are working harder than ever and
for substantially less income than they were at the beginning of 2003. A quick
scan of the airline industry will tell you we are, by no means, alone in this
regard.

Capt. Ralph Hunter
President
Allied Pilots
Association
Fort Worth, Texas

Pilots making more money, given all the bankruptcies and layoffs? Hardly makes any sense to me. They raise some interesting points — and should make you wonder what sort of unwarranted assumptions are built into the Labor Department models . . .

The graphic detailing the salary gains from the original WSJ article is below.

click for larger graphic

Labor_wages09122005210412


Source:

We’re Earning More? You Could’ve Fooled Us
September 26, 2005; Page A19
http://online.wsj.com/article/0,,SB112768744339751528,00.html

Wage Winners and Losers
Most Paychecks Fell in 2004 But U.S. Survey Finds Pilots, Doctors Came Out Ahead
By JESSICA E. VASCELLARO
THE WALL STREET JOURNAL, September 13, 2005; Page B1
http://online.wsj.com/article/0,,SB112657650869238922,00.html
 

Category: Economy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

14 Responses to “How accurate is Labor Dept. Data?”

  1. MRF says:

    Could it be because layoffs come from the bottom of the seniority list? I doubt this survey takes layoffs into account at all, so if you kick out the lower paid pilots the average will increase, even though the total salary amount has shrunk.

  2. kharris says:

    What MRF said. That could make the math work out, even it the pilots who still have jobs took pay cuts.

  3. spencer says:

    The data is for 2004 vs 2003.

    Im willing to bet that if you looked at the data for 2002 and probably 2003 you would find that pilots pay fell much as the letter suggest.

    But 2004 could have been a rebound year — revenue passanger miles rose at double digit rates in 2004 after falling in 2001 and 2002–where much of the loses over the prior years was regained.

    Yes, the survey could be bad–economists generally think the data for economists is bad as well — but there are other possibilities.

  4. nate says:

    salary and wage is only one measure.

    look at warren buffett’s salary.

  5. camille roy says:

    I wonder whether we will find out that the Rethugs have stuffed the Labor Dept & BLS with political patronage appointments, cronies, & hacks, whose primary purpose is to skew the data to perpetuate the rule of the Kiss Rich Butt party.

    This is exactly what they have done at the EPA and FDA.

    No, I’m not angry! Why be angry? It’s just my life and my family that’s at stake.

  6. Lord says:

    The other possibility is large numbers of pilots who don’t work for public airlines are doing somewhat better. These could easily outnumber industry pilots.

    (BARRY SEZ: THEN THEY WOULDN’T BE INCLUDED NI THE LABOR DEPT DATA UNDER “PILOTS”

  7. guerby says:

    Hi, looks in the same line as:
    http://bigpicture.typepad.com/comments/2005/06/something_fishy.html

    BTW, did you do a followup on it?

  8. Zach says:

    I think this may be an interesting corollary to the survivorship bias that David Swensen mentioned in the WSJ interview you excerpted.

  9. Kaiser says:

    Also interesting is that their data said truck driver pay fell, meanwhile every trucker i talk to is complaining about driver shortage and the resulting pay increases they’ve had to give just to keep the drivers they already have.

    Also interesting is that pre-Greenspan inflation data fluctuated between -1.5% and +14%, since greenspan took over the fed inflation has been between +1.8% and +3.5% every single quarter. Data management?

  10. nate says:

    on trucking: it might be interesting to look at it by union vs. non-union and how this has changed over time.

    It might also be interesting to look at plans for retirement for truckers: the mix of defined benefit and defined contribution.

  11. Idaho_Spud says:

    Re: Truck driver wages: A large number of these individuals are paid by the load, thus the exposure to fuel prices is faced by the driver exclusively.

    It makes sense that as fuel prices have consistently risen over the past few years that the average driver’s wage has fallen (net).

  12. Chad K says:

    Looks like the numbers are 1997 vs 2004… not 2003 vs 2004…

    I’d say most of them look correct. Of the two family members I have who are pilots for major airlines…. both had significant increases in salaries in the latter part of the 90s… Obviously some of that has been taken back.

    I’m not sure if anyone remembers the deal the Contenental airlines pilots got around early spring 2001… it was very significant.

  13. Lord says:

    Corporate pilots and privately employed pilots would still be pilots and their numbers could exceed commercial pilots.

  14. Lord says:

    Actually, I have always heard crop dusters are the highest paid of all. Helicopter pilots are also well paid.