https://www.vox.com/new-money/2017/4...airlines-raise
American Airlines agreed this week to do something nice for its employees and arguably foresighted for its business by giving flight attendants and pilots a preemptive raise, in order to close a gap that had opened up between their compensation and the compensation paid by rival airlines Delta and United.
Wall Street freaked out, sending American shares plummeting. After all, this is capitalism and the capital owners are supposed to reap the rewards of business success.
?This is frustrating. Labor is being paid first again,? wrote Citi analyst Kevin Crissey in a widely circulated note. ?Shareholders get leftovers.?
JP Morgan?s Jamie Baker was even more scathing than Crissey.
"We are troubled by AAL's wealth transfer of nearly $1 billion to its labor groups,? he wrote, suggesting that the move was not just contestable as a matter of business strategy, but somehow obviously illegitimate.
Baker, however, takes a darker view, saying that not only does the raise increase costs, it ?establishes a worrying precedent, in our view, both for American and the industry."
