3

(De)Regulating Desire: Family Values, Pro-work Politics, and the Airline Deregulation Act of 1978

By the end of the 1970s, flight attendants had transformed the political economy of their workplace. For the first time in the history of the airline industry, flight attendant pay and working conditions matched those of many of the men they worked alongside, as well as those in the high-wage manufacturing sector. Guaranteeing more money for less work, flight attendants’ collective bargaining advances propelled the social and cultural transformation of the decade. Liberated from dependence on husbands’ wages as a supplement for small paychecks, flight attendants had the financial freedom to choose a variety of domestic and intimate arrangements. They could stay single and live alone, cohabitate with friends or lovers, have children outside marriage, or join lesbian or gay subcultures. With the economic resources to satisfy a far broader range of personal desires, flight attendants challenged the ideology of domesticity and family that was the bedrock of the mid-twentieth-century economy.

Just as activists at Pan Am, TWA, United, and other major carriers celebrated watershed advances, a significant countervailing trend was developing in the broader economy and culture. By 1978, a tightly organized, well-funded, pro-business activist movement was gaining political traction by providing solutions for the decade’s economic instability.1 Although the economy had officially come out of recession in mid-1975, high interest rates, intensifying inflation, and persistent unemployment were providing challenges unseen since the Great Depression for most working people—including those in the middle class. Pro-business activists argued that while the high taxes, strict government regulation, and generous welfare benefits of the midcentury economy provided protection for African Americans, students, feminists, the poor, and other aggrieved groups, they took opportunities away from hardworking, middle-class American families. The solution, they insisted, was to take the fetters off the economy, allowing big business to provide new chances for people who valued family and work.2

The airline industry became an early test case for the emerging pro-work, pro-family political agenda. In October 1978, President Jimmy Carter signed the Airline Deregulation Act. Eliminating strict government controls on pricing and competition, deregulation opened the industry to new, upstart airlines that paid employees far less than the established carriers and that in turn offered lower fares. During the same months that flight attendant unions were winning economic and cultural mobility for women workers, deregulation placed an unprecedented burden on their employers’ finances. The consequences are difficult to overstate. In the first five years after deregulation, Braniff collapsed, and Pan Am, Eastern, and others forced drastic wage cuts on all employees. Shortly after the ink dried on lucrative new flight attendant contracts, the new pro-family, pro-work politics pushed managers to break those contracts. By early 1984 at Continental Airlines, for example, where flight attendant pay had previously topped out at $40 per hour, a bankruptcy and a failed strike allowed the airline to cut the maximum wage to $16.47 an hour,3 returning wages to a level unseen since 1957.4 Unfortunately for the labor movement, the trend was by no means isolated to the airlines, as wages also collapsed in such heavily unionized industries as meatpacking, construction, telecommunications, and trucking.5

This chapter focuses on the deregulation of the airline industry to illuminate the practices and ideologies that converted much of the economy from a high-wage to a low-wage model in the late 1970s and 1980s. It considers how policymakers arrived at a new consensus on neoliberal reforms that made economic sustenance much more difficult for working people, including most of the white middle class. The domain of sexuality provides a revealing lens for approaching that question. I demonstrate that a new constellation of public policy aimed to produce a new sexual subject in the 1980s, a person with a new set of desires that were far different from those of many 1970s flight attendant unionists. Pro-work, pro-family values would define that subject. Those values, commitments like thrift, self-denial, deferred gratification, and personal responsibility, would in turn be the basis for an efficient new economy that would finally end the downturn of the 1970s. As a coalition of public officials, activists, and intellectuals designed and implemented this family values economy, they touched off a bitter conflict with the flight attendant union movement and with other groups that refused to subscribe to this new sexual subjectivity. By analyzing that conflict, we can understand both the foundations of the new economy and why unions—within and beyond the airline industry—have had such a difficult time intervening in an economy that elevates the moral significance of family and work.

Pro-work Politics and the Airline Deregulation Act of 1978

To much of the white middle class, it seemed as if work was being devalued in the late 1970s. As the federal government printed money to pay for an expansive Cold War military and for Great Society social programs, and as energy costs soared after the second oil shock in 1979, the inflation rate climbed toward a worrisome peak of 16 percent in 1980.6 Trying to chase down inflation, the Federal Reserve repeatedly raised interest rates, which topped out at a painful 18.9 percent.7 Therefore, even if an ordinary family breadwinner did everything right, building skills and productivity, getting promoted, earning incremental wage increases, and picking up overtime, that person’s purchasing power declined throughout the 1970s. Mass consumption and suburban home ownership, the bedrocks of postwar middle-class white identity, were jeopardized in the economic malaise, as rising consumer prices drove up the cost of everything from a boat to a summer vacation and as high interest rates made it difficult for many middle-class families to qualify for a home mortgage. To some suburban whites, the Democratic Party, which had been the handmaiden of the modern middle class in the decades after the war, seemed more focused on addressing the demands of radical movements for social change than on the pocketbook politics of working families.8 Taking advantage of that discontent, a resurgent conservative movement flourished by the end of the 1970s. Success came as conservative activists centered political analysis on middle-class anxiety about the devaluation of work.

The new pro-work agenda would originate not in traditional venues of bootstraps ideology, including the Republican Party, elite business schools, or corporate boardrooms, but in an ascendant political institution: the conservative think tank. Such groups were by no means new in the 1970s; the American Enterprise Institute (AEI) dated back to the 1930s, and such organizations as the National Association of Manufacturers and the U.S. Chamber of Commerce had spent decades advocating for the interests of big business. What changed in the 1970s, however, was the scope of the pro-business message emanating from conservative think tanks. Whereas earlier advocacy had focused on fighting particular unions or on pushing for specific corporate tax breaks, the new pro-business agenda centered on long-term political economic change. According to AEI, the Heritage Foundation, the Cato Institute, and other ascendant groups, pro-business reforms would help break the inflationary spiral, reduce unemployment, and restore the global competitiveness of the United States. Pitching a newly ambitious agenda, conservative think tanks channeled donations from major corporations and elite private donors to fund the work of those best trained to produce new ideas: college professors from elite universities. Although some of those scholars had carved out a niche as far-right thinkers—such as Richard Laffer at the University of Southern California—many others were widely cited mainstream scholars, including Alfred Kahn in the Columbia University Economics Department, and Harvard Law School’s Steven Breyer, who went on to serve on the U.S. Supreme Court.9

To engage a broader public than their predecessors, the conservative think tanks of the 1970s retooled their message. As historian Jason Stahl argues in Right Moves, think tanks’ growing power came as they embraced a new political strategy called “sensible conservatism.” Leaders at AEI and other think tanks recognized that the authoritarian, segregationist, anti-Semitic currents that dominated Goldwater-era conservatism had been marginalized amid the social and cultural transformation of the 1960s. Rather than attempt to rebuild public support for the earlier extremist approach, think tank intellectuals focused on “sensible” new issues with broad appeal, aiming to build coalitions between major corporations, small businesses, and middle-class families.10

Work became a key venue on which sensible conservatives built those new coalitions. According to historian Kim Phillips-Fein, conservative think tankers drew an ideological line between workers and nonworkers—between self-denying, responsible, hardworking families on the one hand and self-indulgent, irresponsible, nonworking welfare recipients on the other.11 Aligning a conversation about family with one about work, activists solidified alliances between two growing political movements in the 1970s: evangelical Christians organizing around “family values” and pro-business activists pushing for tax cuts and deregulation. They did so by arguing that progressive taxes confiscated wages from working families and transferred them to people who refused to work, and by arguing that government regulation hamstrung major employers, preventing them from creating jobs for families that wanted to work. According to this line of analysis, progressive taxation, government regulation, and the social safety net were both antifamily and antiwork. To eliminate the barriers that they insisted had been built in front of middle-class families, sensible conservatives proposed a spectrum of policy reforms: tax cuts that would allow workers to keep more of their pay, the curtailment of welfare programs to penalize nonwork, and regulatory reforms that would allow businesses to spend less time complying with government oversight and more time creating jobs for hardworking families.12

By the mid-1970s, the ascendant conservative movement had chosen the airline industry as a test case for its pro-family, pro-work, antiregulatory political agenda. The choice is, at first glance, surprising. After all, state oversight had been a foundation of the unparalleled success of the business before 1970, one that had created tens of thousands of high-paying jobs for the middle class.13 Comprehensive regulation came to the airlines with the Civil Aeronautics Act (CAA) of 1938, legislation that aimed to stabilize a fledgling industry. During the first years of scheduled air service in the 1920s, fatal accidents were all too common as carriers struggled to deploy new and often untested technology to meet competition from a steady stream of new entrants in the business. Facing public outcry after scores of crash-related deaths, and amid the broader economic uncertainty of the Great Depression, policymakers began to insist that federal intervention to limit competition would allow the airlines the economic stability necessary to improve their margin of safety. Linking a long-established pattern of government intervention in the transport industry—the railroads had been federally regulated since Congress created the Interstate Commerce Commission in 1877—with New Deal regulatory expertise, the Roosevelt administration implemented three key regulations with the CAA. First, strict barriers to entry limited service on trunk routes to firms already licensed to fly. Second, price floors and ceilings prevented airlines from launching destructive fare wars and guaranteed each company a reasonable stream of revenue. Finally, government control of each carrier’s route network helped ensure a continuous—yet limited—amount of competition.14 Aviation flourished under the new regulatory framework. The regulated airlines tripled the growth rate of the broader economy—even during the booming postwar years.15 In just four decades, the airlines had gone from a hopscotch of hundred-mile trips on lumbering thirty-seat propeller planes to a round-the-world network of jumbo jets flying nearly as fast as the speed of sound.

The dynamism of the airline industry began to evaporate in the 1970s, catching the attention of pro-work, antiregulatory activists. In its fourth decade, economists and policymakers began to argue that regulation had become a victim of its own success. Since airlines had to petition the federal government before they could offer a new fare or launch a new route, regulators’ workload mushroomed with the growth of the industry. By the late 1960s, the flurry of requests meant that it often took regulators so long to process paperwork that route and fare awards would no longer match the conditions of a changed marketplace. For example, regulators took four years to rule on Pan Am, TWA, and Northwest’s 1965 request for new routes to Hawaii and Japan.16 Worried that regulatory imprecision had hamstrung airline operations, bankers were increasingly reluctant to authorize loans to even the strongest airlines. Actuaries pointed out that while industry revenues had increased sevenfold between 1959 and 1977—from $2.3 billion to $15 billion annually—profits were stagnant.17 Investors’ jitters had particularly troublesome consequences for the airlines, since insurance companies and commercial banks typically financed 85 percent of aircraft acquisitions.18 Lacking Wall Street’s confidence, carriers were unable to borrow enough money to buy the newer, more fuel-efficient aircraft that would help mitigate the high energy costs of the 1970s. Aiming to rebuild investor confidence, a narrow cohort of policymakers and academic economists—many of whom were affiliated with think tanks like the American Enterprise Institute—came up with a solution: lift the government fetters that limited management discretion in deploying their assets and pricing their products.

The pro-business activist movement’s solution to the airlines’ 1970s problems originated in the scholarly work of Alfred Kahn, the AEI fellow who is widely recognized as the intellectual architect of the Airline Deregulation Act.19 In his 1970 tome The Economics of Regulation, Kahn argued that consumer prices were a key venue for reducing production costs and fighting inflation. If goods were priced according to their “marginal cost”—the amount it would take to make one more unit of that good—consumers would chose the cheapest product, which would in turn reward the lowest-cost producer. In order for consumers to choose the lowest-cost product, however, prices would have to more accurately reflect what it cost to make a product, costs that Kahn believed government oversight hid in regulated industries.20 Kahn’s theory worked when he implemented it as the state of New York’s chief utilities regulator in the early 1970s. Falling electricity prices caught the attention of policymakers struggling to control rising consumer prices in the mid-1970s.21 Although Kahn—a lifelong Democrat—found a receptive audience for his scholarship on deregulation in both major political parties, he also faced strident critics. Unions, which still represented almost 30 percent of the workforce in the 1970s, were lined up against deregulation in all industries. Kahn’s application of marginal pricing, labor leaders argued, would spawn a race to the bottom in deregulated industries. Wages would fall and benefits would disappear as consumers flocked to firms with the lowest operating costs. Facing a pushback from organized labor, Kahn and his AEI colleagues would have to find a way to persuade congressional Democrats—and, after January 1977, President Carter—to break with their allies in organized labor if they wanted deregulation to pass.

To meet this challenge, the advocates of deregulation framed their bid not in terms of profit or efficiency but in terms of their broader commitment to pro-work policy. Marking a populist claim that airline deregulation would create new opportunities for working people, pro-deregulation scholars at AEI found their most vocal and unlikely ally: Massachusetts senator Edward Kennedy. A stalwart pro-labor Democrat, Senate Judiciary Committee chair Kennedy convened a series of hearings on airline regulatory reform beginning in February 1975, joining forces with Utah Democratic senator Howard Cannon to write the first of several competing bills that would comprehensively deregulate the industry. Kennedy offered airline deregulation as an innovative solution to address the pocketbook issues of the 1970s middle class, one that would enhance his identity as the champion of the common man while allowing him to distance himself from trade union bureaucrats whose work rule and wage settlements were being blamed for rising consumer prices.22

As he took the microphone and welcomed the public to a Senate Commerce Committee meeting in April 1976, Ted Kennedy insisted that federal regulation had tailored the airline industry to the interests of the elite. Because the federal government had complete control over destinations and prices, customer service was the only means carriers could use to woo passengers away from one another. Thus, airlines offered lavish food service and bought Valentino uniforms (see Chapter 1) for their flight attendants when they could have focused on providing a simpler, cheaper, and more efficient product to serve a broader cross-section of the traveling public. Opulence was certainly enjoyable for those who could afford it, but since the airlines could pass the cost of service on to passengers through government-mandated fare increases, the lavish experience aloft not only excluded ordinary people but also fueled the inflation that made it harder for the middle class to get by.23 The cheapest economy-class ticket between New York and Los Angeles in 1969, for example, cost the equivalent of $1,880 round trip, putting air travel far beyond the means of the average middle-class family even in the high-wage economy of the 1960s.24 For Kennedy, a deregulated marketplace would spawn competition that would force the airlines to shift focus away from the Valentino uniforms and toward making travel more accessible.

Airline union leaders were quick to chastise Kennedy, insisting that the removal of government barriers to entry would subject living wage jobs to downward pressure from non-union upstarts.25 Kennedy and the deregulators responded with a tightly argued answer that originated in American Enterprise Institute research on “load factor,” or the percentage of full seats on a given flight. The federal government, Kennedy pointed out, set prices with the goal of keeping 55 percent of airplane seats full. If the airlines were allowed to stimulate demand with lower fares, they could fill up all those empty seats and enhance profits without enforcing layoffs or cutting wages, Kennedy argued.26 In other words, fares would go down not because the price of inputs—such as flight attendant wages—would go down but because on full airplanes an airline would use fewer inputs per passenger.27 Lower fares and fuller airplanes would actually increase employment in a deregulated environment, the pro-deregulation group insisted. Airlines would need more ticket agents, more salespeople, more cleaners, and more flight attendants to meet the demand spike after deregulation passed and fares dropped. Publicly scolding the “management of airline unions” for failing to endorse his load factor plan, Kennedy insisted that while a few stodgy trade unionists might not understand deregulation, front-line airline employees stood to reap its benefits.28 By lowering airfares and creating jobs, deregulation would bring opportunities for work and consumption that were slipping out of the hands of the middle class in the 1970s.

In an era of shrinking consumer purchasing power and persistent unemployment, framing deregulation as a means to reduce prices and create jobs overwhelmed oppositional mobilization from unions and from airline managers who feared losing state protection for their businesses. The Airline Deregulation Act passed Congress with broad support from pro-business Republicans and pro-labor Democrats, and it received President Carter’s signature on October 24, 1978. Regulatory fetters would gradually disappear over five years. Fares could come down immediately by as much as 50 percent, and anyone who was “fit, willing, and able” could start a new airline. What had begun as a scholarly effort by a few think tanks to reshape politics around “sensible conservatism” was now a centerpiece of the bipartisan response to the economic crisis of the 1970s. Overnight, revenue streams at the major airlines would begin to evaporate, compromising the economic integrity of the corporations that the flight attendant union movement had made its primary point of political intervention in the 1970s. With Ted Kennedy and think tank conservatives both promising that deregulation would soon create work opportunities for the middle class, a bitter debate would emerge about the nature of those new jobs. Flight attendants would be at the center of that debate.

The Economic Consequences of Pro-work Policy

The Airline Deregulation Act of 1978 was part of a political transformation that aimed to restore the value of hard work. Whether in broader antitax and antiwelfare mobilization that sought to allow middle-class families to keep more of their paychecks or in pro-deregulation efforts to lower prices, stimulate the market, and create jobs, work was assumed to be a cultural and moral good. With all the discussion of work, however, there was little public debate the economic value of work. Most analysis failed to address how antitax, antiwelfare, and antiregulatory reforms would shape the pay, benefits, and work rules that jobs offered. Indeed, the emerging consensus among policymakers that work was the solution to the economic anxieties of the 1970s suppressed consideration of how people’s jobs could be the cause of economic problems for the poor and middle class alike. Absent though it was in airline policy discussions before October 1978, the economic value of work was at the center of controversy in the airline industry as soon as deregulation passed. In the first decade after deregulation, airline unionists staged a series of bitter and often unsuccessful strikes that aimed to contest the rapid economic devaluation of their work. The consequences of pro-work policy, flight attendants and other activists argued, were longer hours and far lower pay.

There was a notable exception to the elision of labor economics from the policy debate about airline deregulation in the late 1970s, an exception that foreshadowed the coming unrest in the industry. On April 12, 1976, Frank Lorenzo, the CEO of a small, local-service carrier from the banks of the Rio Grande called Texas International Airlines, took the stand in front of the House Aviation Subcommittee. A Spanish immigrant’s son turned Texas financier, Lorenzo joined the other airline managers in opposing deregulation.29 But while his colleagues focused on arcane operational complexities, Lorenzo made a concise, hard-hitting presentation about how deregulation would affect employee wages and benefits. Texas International was in a unique position because the Texas interstate air market had always been unregulated. Five years earlier, a Dallas businessman named Herb Kelleher had started Southwest Airlines, a company that provided cheap, convenient flights between Dallas, Houston, and San Antonio. Southwest was drastically undercutting Lorenzo and his established peers, charging up to 40 percent less than Texas International and Braniff, airlines that were prevented from offering such discounts because they also operated outside Texas and were thus regulated by the federal government. Lorenzo insisted, though, that it was not the absence of price controls that allowed Southwest to charge so little. Instead, it was rock-bottom labor costs that made Southwest Airlines an immediate success.30

Lorenzo held up a data table for his audience that revealed a disturbing trend for airline workers. The chart compared the wages of six employee groups from Texas International with the same groups at Southwest. At both airlines, pilots earned the most of any class of employee, and at both airlines flight attendants earned the least. Yet for all employee groups at Southwest, wages were at least 25 percent lower than at Texas International. That was only half the story, Lorenzo argued. Focusing his analysis on a comparison of flight attendants, he demonstrated that entry-level wages were fairly high at Southwest. But whereas established lines had given flight attendants annual raises for at least a decade, Southwest crews had received only a couple of pay bumps. With a flat pay scale and no work rules, Lorenzo noted, turnover was high at Southwest. At Braniff and Texas International, however, flight attendant union activists had turned the job into a career and stayed on the job for at least ten years at both carriers. Senior, unionized flight attendants made Braniff and Texas International’s labor costs far higher than Southwest’s, Lorenzo argued.31 Thus, Texas International was losing money while Southwest reaped a $2.5 million profit in 1975, earnings funded almost entirely by Southwest’s below-market labor costs.32 Lorenzo argued that if the federal government emulated the state of Texas and implemented deregulation, new entrants like Southwest would pop up across the country and hire young people right off the street, undercutting mature competitors with heavily unionized workforces. The cost savings of deregulation would come, Lorenzo insisted, not from Ted Kennedy’s claims about load factor and job creation but from individual airlines’ ability to pay their employees less. Deregulation would, in other words, be a tool to confiscate the gains of flight attendant unionism and of other forms of airline activism.

The audience was silent. When Lorenzo finished, deregulation co-sponsor Senator Cannon asked, “Do you think that [deregulation] would be an attack on the labor movement in this country?” Lorenzo’s response was quick and sharp: “Yes.”

No follow-up questions were asked.33

Stark as it was, Frank Lorenzo’s testimony did not change the policy debate about work or about government regulation in the 1970s. When the Airline Deregulation Act passed after Lorenzo and his colleagues failed to convince Congress of the reform’s pitfalls, Texas International’s finances further deteriorated as the airline faced unfettered competition not just in Texas but across its system. Lorenzo’s airline was hardly unique. As Midway, Air Florida, New York Air, PeoplExpress, and other new companies with rock bottom labor costs sprouted across the country, airfares plummeted. Southwest, for example, jumped onto the Dallas–Oklahoma City route in April 1980, charging just 69 percent of what Braniff and Texas International had offered the day before. And while Allegheny had been getting $123 to carry people from Newark to Pittsburgh, PeoplExpress added the route at just $40.34 As fares tumbled, the negative impact on incumbent carriers and their employees was immediate. By 1981, Western, TWA, and Eastern had petitioned all of their unionized employees for immediate concessionary contract negotiations to reduce labor costs. Texas International was firing pilots for making indignant announcements about the injustice of deregulation aboard their aircraft.35 Pan Am was trying to escape contractual obligations to flight attendants to negotiate better pay and working conditions and had requested government permission to defer pension contributions the airline had fallen behind on.36

As Frank Lorenzo watched airlines with unionized, high-wage employees fail and airlines with young, low-paid employees succeed, he saw a new business opportunity. The major airlines would return to profitability, Lorenzo suspected, if they could cut employee pay and benefits quickly and drastically. Lorenzo knew that union activists would strike to resist such givebacks, but if managers could outlast the rank and file and cut wages by 50 percent or more, robust profits would flow to managers and stockholders. The time was right for Lorenzo to act: the industry’s post-deregulation losses had depressed stock prices, making airlines cheap for prospective buyers. Lorenzo was particularly interested in Los Angeles–based Continental Airlines. A medium-sized airline with strong domestic hubs in Denver and Houston and lucrative international routes to Australia, Continental had a highly paid workforce, including flight attendants who, through the feminist-inspired Union of Flight Attendants Local 1, had just won a 39 percent pay increase with a successful strike over Christmas.37 Recognizing that high labor costs were preventing Continental from matching the fares of discount competitors, and aware that year-over-year first-quarter losses had quadrupled,38 Lorenzo bought up 48 percent of the company’s shares in March 1981.39 If Lorenzo could gain majority stakeholder status, he could force a sale of the company to himself, firing the existing management team and enforcing deep cutbacks on all employees, including flight attendants. Just eighteen months after deregulation had been justified as a policy reform aimed at enhancing the value of hard work, Frank Lorenzo was intervening to drastically reduce the economic value of airline labor. Although he had joined his colleagues in opposing deregulation in the mid-1970s, Frank Lorenzo about-faced after 1980, embracing deregulation as a powerful tool to cut costs and enhance corporate profit margins.

With all of their jobs on the line, Continental’s workers and managers united against Lorenzo. The airline had a new CEO, Alvin Feldman, who had been recruited out of a successful stint at smaller Frontier to help rescue Continental from its post-deregulation woes in the summer of 1980. A Lorenzo takeover, Feldman insisted, would destroy Continental, either because Lorenzo would sell the airline’s valuable South Pacific routes or because he would touch off a costly political dispute with employees when he tried to slash their pay. To thwart the takeover, Feldman initiated merger talks with Western Airlines, another midsized carrier that was burning cash and desperate for a plan to reinvent itself. And if Feldman failed to sell the rest of the shares to Western, employees stepped up to buy the airline, volunteering to cut their own wages in exchange for a 50 percent stake in the company. New shares issued to employees would then dilute Lorenzo’s stake to 24.5 percent, blocking him from acquiring majority status.40

The standoff came to a head at the Continental shareholders’ meeting in Denver on May 7, 1981. Alvin Feldman gaveled down three separate motions to sell Continental to Lorenzo. Each time, employees who had descended on the meeting armed with picket signs and protest chants vigorously cheered Feldman’s grandstanding. Immediately following the shareholders meeting, all unionized employees approved the employee ownership plan, with flight attendants ratifying a 15 percent pay cut in exchange for stock in a referendum on June 15. Significant legal questions, however, remained about the plan to block Lorenzo, especially as it was unclear whether or not Feldman had the legal authority to allow the Continental Board of Directors—and not the shareholders—to decide the fate of Lorenzo’s bid.41

Alvin Feldman and Continental workers’ defense against Frank Lorenzo reached a breaking point during the first week of August 1981. The crisis began when the California Corporations Commission, the regulatory body for publicly held corporations in the state of California, ruled that stockholders would be allowed to vote on all offers to purchase Continental Airlines. Because Lorenzo already owned nearly half the company and had the financial resources to entice the remaining shareholders with a deal more lucrative than the offers on the table from Western Airlines and Continental’s own employees, the stockholder vote would allow Lorenzo to force a sale to himself. Two days after the California decision, members of the Professional Air Traffic Controllers Organization (PATCO) walked out on strike to protest what they insisted was a culture of chronic overwork in the nation’s air traffic control system. Branding the action an illegal wildcat strike and using the standoff as a test case for a new federal commitment to curbing trade union militancy, President Reagan locked strikers out. The administration’s bold intervention widely disrupted air travel and forced controllers who remained on the job to cut capacity by at least 25 percent during the initial months of the lockout. Capacity cuts would compel Feldman to reduce service on the few remaining profitable Continental routes, which would in turn make the company even less attractive to a good-faith buyer like Western Airlines.42

Feldman’s next move was one he could never take back. At seven o’clock in the evening on August 9, 1981, Alvin Feldman committed suicide in his office at Los Angeles International Airport. He left a series of notes that exposed and reflected on his desperation, thoroughly explaining the agony of a personal and professional life from which he saw no way out. Friends knew that Feldman was still reeling from the tragic day a year earlier when his wife had passed away. Now, both Frontier and Continental, the two airlines he had helped build into stalwarts of the regulated era in the 1960s and 1970s, were spiraling out of control in the third year of deregulation. Feldman left behind three college-age children and everyone at Continental Airlines, people distraught at the loss of one of the industry’s most popular leaders and dreading what would come next.43

In the wake of the Feldman tragedy came Frank Lorenzo. After the collapse of the proposed employee buyout and Western Airlines merger following Feldman’s suicide,44 and amid widening losses during the PATCO affair, the last defensive shareholders folded, selling out to Lorenzo on July 13, 1982.45 Lorenzo was clear in his message to all employees as soon as he arrived. Deregulation, as Lorenzo had warned the Senate in 1976, was a policy reform that had drastically reduced the economic value of airline labor. For heavily unionized incumbent carriers such as Continental, minor or incremental labor cost reductions would not be enough. Instead, the established airlines would have to convert their model of employment to match that of the booming service sector, hiring young workers, sloughing coverage for older and sicker employees onto the social safety net, and tailoring pay and benefits to incentivize short-term rather than lifetime employment. Lorenzo’s demand was, expectedly, a nonstarter for flight attendant activists. Refusing to even discuss Lorenzo’s proposal for a 60 percent reduction in pay and benefits, flight attendants mobilized defensively during the first year of Lorenzo’s tenure.

Lorenzo ended the stalemate on September 24, 1983. In what is perhaps the most aggressive management move in the history of collective bargaining in the airline industry, Frank Lorenzo filed for bankruptcy and closed Continental Airlines, grounding all flights and stranding crews and passengers without warning. Sixty-five percent of employees got immediate pink slips and were escorted off the property.46 Those left on the job were sent a short contract with two check boxes and a signature line at the bottom. The contract was called the Emergency Work Rules. If a flight attendant signed it, she would agree to reduce her top wage from over $40 to $16.47 per hour; to eliminate duty rigs, line guarantee, and all other work rules; to terminate pension benefits; and to extend the workday to sixteen hours.47 If she refused, she would be terminated on the spot. Compiling a list of all those who signed, Lorenzo restarted Continental three days later. The new airline aimed to run the bulk of its pre-bankruptcy schedule with just forty-two hundred of its twelve thousand former employees.48 With all unionized groups on strike—machinists had walked off the job in August, and pilots and flight attendants called a strike once the Emergency Work Rules were administered—the build back was slow. But even by the end of the first full week of operations on October 4, Continental was, depending on the day, running between 10 percent and 20 percent of its normal operation.49 By early 1984, over half of Continental’s flights would be flying again, staffed by a mixture of supervisors and rank-and-file crew members who signed the Emergency Work Rules, crossed the picket line, and reported for work.

As union activists salvaged what little they could and drew the strike to a close, two distinct consequences emerged in the Continental affair. The first and most obvious consequence involved employee pay and benefits and affected all airline employees. Airline deregulation, the progeny of pro-work policy reforms, rapidly eroded the economic value of airline work. Both Ted Kennedy and the AEI scholars were right about deregulation, as load factors shot up after the reform, which in turn created more airline work. The problem for airline workers, however, was that fewer workers would perform much more work for far lower pay. The second political consequence stemmed from family values. Although deregulation brought a new, low-wage model of labor to the airlines, older, patriarchal ideas about the value of men’s work and women’s work governed the economic outcome of the strike. After a 60 percent pay cut, almost no Continental employee could be a breadwinner for his or her family, which effectively ended the family wage system in the airlines. But the residue of the family wage system, the idea that workingmen deserved extra remuneration to fulfill their role as breadwinners, helped redistribute the few remaining resources at Continental away from flight attendants and toward pilots.

The ghost of traditional family values appeared as flight attendant leaders joined forces with pilots in an attempt to force a settlement with Lorenzo. Leaders from both unions approached Lorenzo and submitted a proffer of arbitration—a set of bilateral talks with a neutral facilitator—in an effort to compromise on the pay and benefit cuts that Lorenzo implemented with the Emergency Work Rules. Lorenzo’s response horrified flight attendants and made the outcome of the strike far more divisive. In a pattern that would repeat itself at TWA in 1986 (see Chapter 4) and would shape contractual settlements throughout the 1980s, Lorenzo agreed to arbitration with the pilots but rejected flight attendants’ proposal outright.50 The new regulatory regime would mean cutbacks for everyone, Lorenzo insisted, but traditional ideas about gender and family would inform the severity of those cuts. For pilots, a group whose work had always been imbued with ideas about skill, manhood, heterosexuality, and breadwinning, there would be a future, and one in which the union could continue to engage management even while its power was constricted. But for flight attendants, who had long been presumed to depend on men, there would be no future for their union movement. There would be no family benefits, no work rules, and no longevity pay: all of flight attendant unionists’ 1970s gains would be confiscated.

The Continental Airlines upheaval would have been disorienting to all but the closest analyst of the U.S. political debates in the late 1970s and early 1980s. The resurgent conservative movement had scored substantive advances—including the election of President Ronald Reagan in 1980—by promising to reverse the devaluation of work for the middle class. Pushing to reduce taxes and cut government red tape that had blocked self-reliant, independent, hardworking American families from getting ahead in the 1970s, the new, right-leaning coalition coalesced around pro-work values. But in headline-making labor disputes that followed pro-work reforms in industries from air transport to mining to meatpacking, hardworking people were being dispossessed, ejected from lifetime, middle-class jobs. For workers who found new careers after setbacks like that at Lorenzo’s Continental, most would make only a fraction of the wage from their former unionized career. By the middle of the 1980s, it had become clear that as pro-work political culture intensified, hard work had stopped paying the bills. To understand widespread support among policymakers—and among much of the public—for neoliberal reforms that made people work more for less, I now turn to the discourses that helped manage the vast contradictions that ran through pro-work culture in the 1980s.

Family Values and the Moral Properties of Work

As they pitted workers against nonworkers to justify the Airline Deregulation Act and other sweeping reforms, the resurgent conservative movement transformed the national political debate about work. By 1980, conversation had shifted away from the economic properties of work and toward work’s moral properties. Rather than a means to distribute such material resources as pay, health insurance, and a pension, work was most important because it produced moral values, marking a person as either a deserving, responsible family member or a slothful, indolent nonworker. Labor reforms, then, were important not because they would provide more or less money for workers but because they would produce moral subjects with the right or wrong kind of values. Elevating morality while eliding economics, the resurgent conservative movement opened a space to pass reforms that, while lauding work as a social good, would make it much more difficult for working people to make ends meet.

Framing work in terms of moral and cultural values was by no means a new phenomenon in the 1970s. Rather than cut their argument from whole cloth, conservative activists updated a long-standing tendency in U.S. political and social thought that conflated hard work with moral goodness. As Janet Jakobsen has demonstrated, the booming nineteenth-century U.S. industrial economy depended on the morally regulated activity of the laboring body—the labor that Max Weber calls “worldly asceticism.”51 In other words, the free market flourished because people followed their moral compass, denying indulgence in worldly pleasures and making hard work an end—and not a means—in their life. Jakobsen incisively argues that although the work ethic was derived from Calvinist religious beliefs, it became the basis for secular free market society in the nineteenth century.52 Nevertheless, even though hard work remains a foundation of contemporary, secular, liberal capitalist society, work is still understood to define a person’s moral worthiness. Kathi Weeks, for example, argues that the work ethic defines not just how someone behaves but who they are. The work ethic, Weeks insists, “takes aim not just at consciousness, but also at the capacity and energies of the body, and the objects and aims of its desires.”53 Weeks shows us that according to the work ethic, hard work makes people desire the right things.

Grounded though the work ethic was in two hundred years of social thought, pro-work activists would nevertheless face a significant challenge in making their case to renew the ethic of hard work in the 1970s and 1980s. During the previous fifty years, social movements had transformed the work ethic. In the mid-1930s, for example, a coalition between Popular Front radicals and industrial unions won unprecedented resources for working people, securing a living wage, work rules, paid vacations, and company-paid pensions. For the first time, those who had grown up among the immigrant and working poor could work to live rather than live to work. A generation later, the social movements of the 1960s and 1970s gained access to those resources for some African Americans, Latinos, single women, lesbians and gays, and service and agricultural workers who had been locked out of the advances of the 1930s. Fifty years of organizing had inverted the relationship at the core of the work ethic, as people’s physical, emotional, and material desires determined the amount and intensity at which they worked and not the other way around. Flight attendants’ succession of victories for working women in the late 1970s was, therefore, running with the current of the mid-twentieth century and not against it.

To once again reverse that current in the 1970s and 1980s, pro-work activists would turn to a category that had always buttressed the work ethic: the category of family. As Weeks goes on to argue, the family ethic had historically served as a supplement to the work ethic; politicians and reformers promoted family values as a “crucial adjunct” to work discipline.54 Family values, in other words, would serve as another sign of a person’s dedication to work. After both the work ethic and the family ethic were thrown into question during the social transformation of the 1960s and 1970s, the Reagan administration and its allies among pro-business and pro-family activists reiterated the symbiotic relationship between the two. In a report on the state of the American family, for example, the Reagan White House argued that “neither the modern family nor the free market system could exist without the other.”55

From the renewed attention to the mutually constitutive relationship between work and family came the primary political justification for the pro-work reforms of the 1970s and 1980s. Tax cuts, welfare rollbacks, and deregulation were necessary not because of what they would do to people’s paychecks but because they would restore traditional family values. Focused on the family, the pro-work movement was able to shift the conversation away from deregulation’s negative impact on working people like those at Frank Lorenzo’s Continental Airlines and toward the presumed gains that a return to traditional family values would bring to the wider American middle class. To make that shift, pro-work activists framed family in specific terms in the 1970s and 1980s, using sexuality—and the long-standing intersection of sexuality with ideas about race, gender, and poverty—to make the case for pro-work reforms.

Nowhere were those racialized and gendered ideas about sexuality more visible than in the pro-work scholarship of Charles Murray. Just a few months after Frank Lorenzo cut Continental flight attendants’ wages in half, Murray published his watershed text Losing Ground in 1984. Murray had a Ph.D. in political science from M.I.T. and would end up joining pro-deregulation scholars at the American Enterprise Institute in 1990. During the 1980s, Murray traveled in high-profile conservative intellectual circles in Washington, and he wrote Losing Ground while on staff at the Manhattan Institute, another conservative think tank. Murray’s work rattled mainstream scholars and policymakers with what was, at the time, an extreme prescription. Save for a very short-term unemployment insurance program, Murray advocated a complete dismantling of the social safety net for working-age adults, jettisoning Medicaid, public housing, direct cash transfers, and all other forms of public assistance.56 Rather than a means to protect society’s most vulnerable, Murray insisted that social programs were the cause of deep cultural pathologies that in turn trapped people in a cycle of poverty. Tearing away the social safety net—and forcing people to take responsibility for themselves and their families—would be the only way to lift people out of poverty.

Murray’s pro-work analysis rested on an argument not about middle-class people like flight attendants or other workers at Continental Airlines. Instead, Murray shifted the conversation to focus on people who, by and large, lacked the money, the political connections, or the legal resources to challenge him: poor women on welfare, particularly poor black women on welfare. Murray regurgitated long-standing, racist ideas that black people are self-indulgent while white people are self-restrained, that black women are sexually aggressive while white women are chaste, and that black women are domineering and emasculating while white women defer to men’s authority. While poor black women appeared on page after page of Losing Ground without their consent, racial and economic privilege protected flight attendants and other middle-class workers from subjection to Murray’s scrutiny. It would thus be unfair to make a direct linkage between a normatively white airline workforce and the women in Losing Ground or to assume that policymakers would think about the sexuality of flight attendants in the same terms that they would think about the sexuality of black women on welfare.

Where a precise connection should be made, however, lies in Murray’s approach to work. For Murray, jobs—even very low-wage jobs—mandate responsible behavior that leads to strong families and strong economies. His critique centers on changes to U.S. welfare policy that Murray insists discouraged both traditional family and hard work. Before 1960, if a woman went on public assistance, she was barred from supplementing her income with money from a husband or lover. Most women chose both a relationship and work over welfare since the income from two jobs was worth far more than one welfare check. Domesticity and hard work were, therefore, the dual foundations of low-income women’s economic security.57 This changed in the mid-1960s, when the federal government began allowing welfare recipients to supplement their income with cash from friends or lovers as long as the woman was not married to the person providing the money. After the reform, poor women could maximize their income by staying single and staying on welfare.58 By taking low-wage jobs and marriage out of the equation for many poor women, Murray argued, the Aid to Families with Dependent Children (AFDC) reforms of the mid-1960s created a sexual culture that valued immediate sexual gratification over long-term commitment, and illegitimacy over the nuclear family. To reverse that trend, Murray proposed eliminating welfare in an effort to move domesticity and hard work back to the center of poor women’s lives.59

Murray’s focus on morality and family helped remake economic policy debates in the 1980s, shifting analysis away from the economic impact of welfare cuts and helping build a new consensus among policymakers that pro-work reforms were in the interest of both the poor and the middle class. For Murray and other antiwelfare activists, trimming the social safety net was important because it would produce a new sexual subject, a person committed to family values such as self-denial, deferred gratification, and personal responsibility. Public policy, Murray and others argued, should penalize the person who stayed single, who cohabitated with lovers, or who had children outside marriage. If Congress obliged Murray’s cohort and passed pro-work reforms, it would remake the economy into the family values economy, one in which domesticity and hard work would be the foundations of cultural and economic life. Domesticity and hard work are, of course, the bedrock values of the middle class, which helped Murray, the pro-deregulation AEI fellows, and other pro-work scholars frame their reforms as keys to the restoration of middle-class prosperity in the 1980s.

Lost in this conversation was that the reorganization of the economy around domesticity and hard work would shrink the middle class and jeopardize its quality of life. Sexualized racism helped Murray and other pro-work activists avoid those economic conversations because some of the white middle class would assume that only poor and immigrant women of color would have to take the low-wage jobs that the family values economy was creating. The Continental Airlines strike of 1983 demonstrated, however, that race and class privilege would not protect the middle class. For as policymakers were drawing up the Personal Responsibility and Work Opportunity Reconciliation Act, a reform that would enshrine Murray’s antiwelfare theory in law and make poor women of color the hardest hit in the conversion to the family values economy, they were also deregulating core industries and passing right-to-work laws. Therefore, and despite the prominent role that middle-class values played in justifying these reforms, economic sustenance would become much more difficult for most of the middle class after 1980 because low-wage labor had become the dominant feature of the labor market.

Conclusion: Alternative Families and the Crisis of the Labor Movement

In the wake of the Airline Deregulation Act and a constellation of other pro-work reforms, a contradiction emerged between the growing investment in traditional family values and the proliferation of families that were anything but traditional. After Frank Lorenzo became the first executive to convert a major airline from living-wage to low-wage labor, Continental Airlines flight attendants were compensated much like the mostly-female workforce in the burgeoning service economy. Like workers in hotels, restaurants, and retail, post-strike flight attendants made a straight hourly wage that included no work rules, no monthly pay guarantees, no company-paid defined benefit pension, and the ability to be discharged at any moment without explanation. As workers lost control over wages and scheduling, the domestic space of the family became a place to make up for the uncertainties of work. Husbands, wives, and older children could pool wages from multiple low-wage jobs to pay the bills and could rotate work schedules to care for younger children when other family members were on the job. When those resources were insufficient, neighbors, friends, and extended family could chip in to make ends meet. In none too ironic terms, as the traditional breadwinner husband and dependent wife disappeared as economic forms, many more middle-class families grappled with the instabilities that Charles Murray so vehemently condemned in poor black women’s lives.

That alternative families were a defining feature of the family values economy does not mean that traditional patriarchal values had disappeared after the 1970s. On the contrary, with self-described “pro-family” activists driving the pro-work reforms of the 1970s, traditional patriarchy became even more important to politics. The evangelical Christian organizations that made up the pro-family movement mobilized for a rigidly defined traditional family—a strictly monogamous, married, domesticated unit where a man was the primary decision maker in the home and where women and children deferred to men’s authority—and against any challenge to that family from feminists, gay activists, single women, or sex radicals. Indeed, even as the economic and cultural form of traditional family vanished, it remained an enduring ideal. That residue was evident in Frank Lorenzo’s final settlement with the Continental Airlines workers, one that tried to figure pilots as breadwinners and flight attendants as men’s dependents even as all living-wage union contracts were pounded to smithereens.

The tension between family values and alternative families proved to be a daunting challenge for union activists, both among flight attendants and in all sectors of the economy. As trucking, telecommunications, and other industries were deregulated and an antilabor executive, legislative, and judicial branch dealt more setbacks to unions during labor disputes, real wages continued to fall in the 1980s. With low-wage work replacing the living wage, families were stretched thin, looking more and more like the female-headed “broken” homes that the pro-family movement scorned.60 After a decade of framing work in terms of morality—the dominant approach that think tankers like Charles Murray, evangelical groups like Focus on the Family, all of the Republican leadership including Ronald Reagan, and “new Democrats” like Bill Clinton had all taken by 1990—much of the public assumed that nontraditional families were the cause rather than a consequence of people’s newfound poverty. Restoring the middle class, then, would require a campaign to restore society’s moral values and not one to improve wages, benefits, and work rules. In that shift, unions lost a long-standing point of leverage as the economics of labor faded to the margins of the public debate about the crisis facing the American working and middle classes in the 1980s.

Labor’s challenge would only intensify in the airline industry as the 1980s progressed and pro-work reforms continued to gain momentum. Shortly after the Airline Deregulation Act was ratified, Congress initiated a decade-long deregulation of the banking industry. After those reforms allowed a far greater percentage of banks’ profit-making activities to occur beyond the scope of government oversight, Wall Street boomed. In a deregulated financial marketplace, airline managers could access vast new sums of capital to underwrite their effort to extract wage and benefit concessions from front-line employees. Such efforts touched off a new round of unrest, and bitter strikes shut down United in 1985, TWA in 1986, and Eastern in 1989. Family values would organize the terms of public debate about that unrest. Since flight attendants had both rejected the pro-family movement’s renewed commitment to traditional patriarchal values and resisted the threadbare uncertainties that most families in the family values economy faced, their unions would be front and center in those debates.

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