What Is Full Retro
09-29-2022, 08:04 AM
#22
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Joined APC: Apr 2018
Posts: 3,250
Even if you disagree with Mooner, at least he puts a little bit of effort in to flesh out his argument. You( and several others)???? Not so much. I think the term is called, "cancel culture". It is wrong, no matter which side does it.
09-29-2022, 08:10 AM
#23
Moderator
Joined APC: Sep 2011
Posts: 4,927
Buck, with respect… Effectively carrying management’s water should be called out, regardless of how much flesh is on the bone. It’s one thing to dissect their position so as to defeat it. It’s another to undermine your own NC with some of the stuff that shows up here. There is a difference.
09-29-2022, 08:12 AM
#24
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Joined APC: Apr 2018
Posts: 3,269
Do you guys really think one guy throwing out random low balls is going to seriously effect negotiations? The union has plenty of polling data to go off. If a few posters on here can tank our contract then we have way bigger issues. Just relax!
09-29-2022, 08:24 AM
#26
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Joined APC: May 2012
Posts: 194
CPI is definitely flawed as measure all metric. It understates for some and overstates for others. It’s useful as metric that everyone can use to analyze with. Obviously the larger the margin between nominal rates and inflation, the safer we are in escaping inflation.
09-29-2022, 08:29 AM
#27
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Joined APC: May 2012
Posts: 194
I don’t. The NC has been gaming this stuff likely since resumption of negotiations. Same with management. This is the end game. It’s naive to think either side isn’t prepared or looking for direction. Both sides are looking at United, not anybody on this forum.
09-29-2022, 08:35 AM
#28
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Joined APC: Nov 2020
Position: Enoch Powell Enthusiast
Posts: 2,306
To compare apples apples, we all have to agree on some stuff up front. Firstly, the concept that we should at a minimum capture inflation. Secondly and historically speaking, we have failed to achieve this minimum. I think we are near total consensus on those points. Further, as a mechanical guide rail, we should agree on what inflation metric we are going to use for historical data. I use the annual Fed CPI inflation rate.
https://fred.stlouisfed.org/graph/?g=UhM9
Inflation:
2020 - 1.23%
2021 - 4.7%
2022 isn’t known yet, but it’s looking to be around 8%.
My math says the compounded rate to made whole on inflation up to Jan 1 2023 is 14.47%. This is the absolute minimum for retro in my mind.
Ideally, I would justify a real raise in 2021 and 2022, while acknowledging the difficulty for the corporation and the US economy in 2020. I would except an argument for an inflation only for that years. How much of a minimum real raise? Considering our track record of lagging inflation, I would consider 1% to be a major victory when considering a minimum. Of course I would be pleased with more. So add another couple of 1% increases for 2021-2022. Now we’re up to 16.77% compounded rate for retro.
Going forward, an estimate for future inflation must be utilized. An estimate can be generated from historical data plus future inflation expectations. The company will want use future inflation expectations because both the US interest rate yield curve and the Eurodollar futures market are inverted. This says relative deflation and lower interest rates are coming. We will want to use the trailing annual inflation rate because after 14 years it is spiking above 3%, currently running at 4.6%. The futures rate will not help us.
I will assume that we prevail at the table, and a 3 year trailing inflation rate will be the metric. Therefore, the 2 annual raises forward, assuming a 5 year deal should be 4.6% in order to not lose ground. Historically, that’s a win. But, I want to go forward. So, as a minimum I’ll add two 1% real raises for 2023 and 2024, making those annual raises 5.6%.
So my minimum is compounded 16.77% retro check for earnings 2020-2022. Then 5.6% date of signing and 5.6% for 2024. Total compounded rate for 5 years of 30.2%. This is an annual compounded rate of 5.4% and compares favorably to the trailing 3 year inflation rate of 4.6%.
Many will say that I’m a management plant or something similarly stupid. Fine, you can’t fix stupid. What I’m angling for is a minimum where you decide whether to blow yourself up or not. In this environment one must figure out where that line is because the stakes are quite a bit higher when inflation is running at 4.6% rather than 2.5%.
Do I think we will get a real raise? United will shortly clarify that question a bit. Their TA is a long way away from that 30% figure. Our mediators are watching. I will say victory declared on the numbers, disregarding personal metrics of perceived value, would be to capture inflation. We have lagged historically and real wages in the US have been flat for 4 decades. We have underperformed and have lost ground to inflation and peers in the US economy.
So I’m not saying we shoot for these numbers. We are and should try to increase the margin between inflation and our pay rates. That would be construed as “restoring the profession.”
We now know what happens when a TA is rejected. Another year (minimum) will go by, the MEC and negotiating committee is demolished and then reconstituted. Personally, I see a lot of ugly going forward for the global economy as that process would unfold. I’m not suggesting a rubber stamp is warranted, only that a cavalier demolition could be a disaster.
So I think it’s beneficial to have some idea what the risks are in the future and at what point taking on the risk will likely yield a potential real return.
If I were management, I would structure my minimum deal:
9% effective retroactive 2022, 5.6% 2023, 5.6% 2024. Signing bonus of 7% for 2020,21 earnings. Retro and signing bonus allocation is all about optics. I would not like to admit to paying “100%” retro. 7% sounds much better.
I don’t know about the 3.17 billion number for the increase of value for the last contract. Assuming that’s true and it was a 27.1% increase, the 30% increase looks pretty favorable in comparison and is 10.7% increase in percentage growth.
Inflation between 2015-2019 ran very low, 1.5% annually compounded. Real raises are easier to achieve in that inflationary environment. In our case we made a pretty dramatic claw back of value, at the time I considered to be within 90% of “par” where par is an achievable level of historical compensation. We’re in a far tougher environment with current trailing inflation at 4.6%.
My hope is United advances the ball and much depends on them. Real gains are achievable. I just wish we were in a leadership position rather than United.
https://fred.stlouisfed.org/graph/?g=UhM9
Inflation:
2020 - 1.23%
2021 - 4.7%
2022 isn’t known yet, but it’s looking to be around 8%.
My math says the compounded rate to made whole on inflation up to Jan 1 2023 is 14.47%. This is the absolute minimum for retro in my mind.
Ideally, I would justify a real raise in 2021 and 2022, while acknowledging the difficulty for the corporation and the US economy in 2020. I would except an argument for an inflation only for that years. How much of a minimum real raise? Considering our track record of lagging inflation, I would consider 1% to be a major victory when considering a minimum. Of course I would be pleased with more. So add another couple of 1% increases for 2021-2022. Now we’re up to 16.77% compounded rate for retro.
Going forward, an estimate for future inflation must be utilized. An estimate can be generated from historical data plus future inflation expectations. The company will want use future inflation expectations because both the US interest rate yield curve and the Eurodollar futures market are inverted. This says relative deflation and lower interest rates are coming. We will want to use the trailing annual inflation rate because after 14 years it is spiking above 3%, currently running at 4.6%. The futures rate will not help us.
I will assume that we prevail at the table, and a 3 year trailing inflation rate will be the metric. Therefore, the 2 annual raises forward, assuming a 5 year deal should be 4.6% in order to not lose ground. Historically, that’s a win. But, I want to go forward. So, as a minimum I’ll add two 1% real raises for 2023 and 2024, making those annual raises 5.6%.
So my minimum is compounded 16.77% retro check for earnings 2020-2022. Then 5.6% date of signing and 5.6% for 2024. Total compounded rate for 5 years of 30.2%. This is an annual compounded rate of 5.4% and compares favorably to the trailing 3 year inflation rate of 4.6%.
Many will say that I’m a management plant or something similarly stupid. Fine, you can’t fix stupid. What I’m angling for is a minimum where you decide whether to blow yourself up or not. In this environment one must figure out where that line is because the stakes are quite a bit higher when inflation is running at 4.6% rather than 2.5%.
Do I think we will get a real raise? United will shortly clarify that question a bit. Their TA is a long way away from that 30% figure. Our mediators are watching. I will say victory declared on the numbers, disregarding personal metrics of perceived value, would be to capture inflation. We have lagged historically and real wages in the US have been flat for 4 decades. We have underperformed and have lost ground to inflation and peers in the US economy.
So I’m not saying we shoot for these numbers. We are and should try to increase the margin between inflation and our pay rates. That would be construed as “restoring the profession.”
We now know what happens when a TA is rejected. Another year (minimum) will go by, the MEC and negotiating committee is demolished and then reconstituted. Personally, I see a lot of ugly going forward for the global economy as that process would unfold. I’m not suggesting a rubber stamp is warranted, only that a cavalier demolition could be a disaster.
So I think it’s beneficial to have some idea what the risks are in the future and at what point taking on the risk will likely yield a potential real return.
If I were management, I would structure my minimum deal:
9% effective retroactive 2022, 5.6% 2023, 5.6% 2024. Signing bonus of 7% for 2020,21 earnings. Retro and signing bonus allocation is all about optics. I would not like to admit to paying “100%” retro. 7% sounds much better.
I don’t know about the 3.17 billion number for the increase of value for the last contract. Assuming that’s true and it was a 27.1% increase, the 30% increase looks pretty favorable in comparison and is 10.7% increase in percentage growth.
Inflation between 2015-2019 ran very low, 1.5% annually compounded. Real raises are easier to achieve in that inflationary environment. In our case we made a pretty dramatic claw back of value, at the time I considered to be within 90% of “par” where par is an achievable level of historical compensation. We’re in a far tougher environment with current trailing inflation at 4.6%.
My hope is United advances the ball and much depends on them. Real gains are achievable. I just wish we were in a leadership position rather than United.
To paraphrase Churchill:
“This reply’s length defends itself from ever being read”
(Quoting a just-as-long post in full before your response was a nice touch).
09-29-2022, 08:56 AM
#29
Gets Weekends Off
Joined APC: May 2012
Posts: 194
Thankfully I haven’t subscribed to limiting one’s self to superficial and simplistic analysis. To each his own.
09-29-2022, 08:59 AM
#30
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Joined APC: Jul 2010
Position: window seat
Posts: 12,544
Exactly. Just as another potential TA1 that doesn't fully capture 100% of all inflation in the form of retro plus gains on top of that, without ANY concessions, will become "TLDR: MEMRAT-NO"
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