This paper uses a variety of data sources to track the earnings
of airline industry employees over the past two decades and assess
the changes that have occurred since deregulation in 1978.
Individual microdata from Census files as well as collective
bargaining contract information are used to follow wages for
pilots, flight attendants, mechanics, and workers as a whole.
Perhaps surprisingly, I find that the real earnings of airline
workers have declined only modestly in the past 10 years.
Comparisons with other groups of workers suggest that these
declines have been about the same or only slightly larger than
those observed for most other workers in the economy. Furthermore,
within the airline industry, the declines in earnings have been
similar for all three groups of skilled workers. If the
deregulated industry can be taken as a competitive benchmark, these
findings suggest that the regulatory rents earned by airline
workers prior to deregulation were relatively small. This view
fails to explain the wide inter-firm variation in earnings that has
emerged in the post-deregulation period, however. An alternative
interpretation is that rents continue to exist at many airline
firms, and that these rents continue to be shared by employees at
the successful airlines.