A joint publication from the UC Berkeley Labor Center and the San Francisco International Airport

This literature review was undertaken at the request of the San Francisco Airport Commission to aid in the evaluation of a proposal to increase wages for those covered under the airport’s Quality Standards Program (QSP). The QSP mandated higher minimum compensation and training standards for airport workers whose jobs impact safety and security. Workers covered by the QSP include screeners, skycaps, baggage handlers, fuelers, customer services agents, airline cleaners and catering workers and other workers with access to secure areas of the airport.

Wages increased for thousands of employees by an average of 22 percent when the policy was implemented in early 2000. A 2003 study by the UC Berkeley Institute of Industrial Relations (now the Institute for Research on Labor and Employment) found that turnover fell by an average of 34 percent and worker performance improved along a range of metrics. Since then, the cost of living in the Bay Area has risen sharply, and the minimum wage in San Francisco has been increased to the point that it is on track to surpass the QSP minimum wage by July, 2018. If no further action is taken, turnover rates at SFO can be expected to increase as a result.[1]

This paper summarizes the literature on the dynamics of wages, turnover, and performance, and how increased wages and lower turnover effect security and public safety outcomes at airports. The first section lays out the empirical evidence of a connection between higher wages and lower turnover in general, followed by specific examples of wages affecting turnover in the aviation industry. The next section draws on the literature examining the effects of higher wages on improved employee performance, again examining evidence from across industries and then focusing on aviation. The final section describes how higher wages, lower turnover, and better job performance lead to improved security and public safety. This section provides evidence from the aviation industry as well as other fields with related public safety and security concerns, including trucking and transportation, food safety, and nursing and nursing home care.

Overall, the evidence indicates that higher wages leads to reduced turnover and better performance by employees, which in turn leads to a safer and more secure environment for both airport employees and the public.
[1] Facing higher turnover, some of the ground handling contractors at SFO began raising wages in 2017 under the understanding that a policy change would be forthcoming.

View the full report.