The health and well-being of New Jersey’s workforce and their families are inextricably tied to the health and vitality of our state’s economy. Business leaders understand that we can’t have a strong recovery without aviation workers who feel safe and secure on the job.
Prior to the pandemic, commercial aviation helped drive $1.7 trillion in U.S. economic activity. Further, U.S. airlines directly employed more than 750,000 people and indirectly supported 10 million other U.S. jobs.
But, as the country battles the greatest public health and economic crises of our lifetimes, New Jersey lawmakers are in danger of putting the state’s economic recovery at risk by passing the so-called Healthy Terminals Act (S989/A2487). Instead of making it easier for people to get back to work, the legislation — which would mandate certain wage rates and benefits for certain airport and train station workers — would threaten job security by imposing new mandates and burdens on businesses and workers.
Estimates reveal that the Healthy Terminals Act in New Jersey and the higher costs imposed on carriers operating in our state would lead to nearly 2,800 fewer New Jersey jobs over the course of a year and a $294 million reduction in annual salaries, wages and benefits for our residents.
The bill would also discourage airlines from servicing airports in the state. A critical driver of local economies, mover of people and goods, and connector of America’s supply chains, U.S. airlines provide a vital lifeline to our region. As a result of the global health crisis, New Jersey is already experiencing one of the largest air-service reductions in the country, with a decline in scheduled flights significantly higher than the national average. Rather than bringing flights back to New Jersey, the proposed legislation threatens to send them to states that do not single out aviation businesses for more onerous regulation.
Over the last year, the devastating impacts of the pandemic have forced some airlines to dissolve, while others avoided mass employee furloughs only through federal payroll support. This economic distress will only grow if this legislation were to pass the Legislature. Today, passenger volume remains approximately 60% lower than this time a year ago and airlines are still collectively burning $150 million in cash every day just to remain operational. Simply put, government mandates to increase labor costs on an industry already in dire straits could be catastrophic.
All of us hoped that the virus would be in retreat by now, and life would be going back to normal. That is sadly not yet the case. While we are beginning to see an increase in vaccinations and a decrease in COVID-19 cases, our nation’s economic recovery will not be swift. These painful realities mean that airlines will continue to be in critical condition, as carriers are operating just over half the flights they did this time last year and are doing so with 18% fewer aircraft.
State lawmakers should have a direct interest in seeing the industry rebound, as New Jersey has seen one of the greatest declines in air travel during the pandemic. But if this act becomes law, the airlines that service Newark Liberty International Airport won’t soon recover, which undoubtedly will have an adverse ripple effect on the broader economic recovery in New Jersey.
It’s not too late for lawmakers to shift their focus toward policies that actually protect the livelihoods of airport and airline employees, rather than creating dynamics that make it impossible to ensure their job security.
Tom Bracken is CEO and president of the New Jersey Chamber of Commerce and Michele Siekerka is CEO and president of the New Jersey Business & Industry Association. Both organizations are based in Trenton.