Originally posted by FMF
A hypothetical scenario.
Let's say I own FMF Airways - the only airline in this scenario, representing the 'industry', but assume that it's a competitive market. Whenever I recruit new cabin staff there are 10,000 applicants for 100 positions I seek to fill.
The applicants are predominantly young, smart, working class women attracted to what they see as a dependent on their employers.
Is this new business scheme an example of progress?
That is an interesting scenario. Certainly things analogous to this do happen in real life.
I would say though, that you're only looking at one side of the scenario. Let's take a look at the other side.
After you've spent $1,000,000 in business capital to open up schools around the country and are charging, say $5,000 for the training course (just to use a round number), Flights R Us school opens up and charges $4,000 for the course. So, you're forced to reduce your price to $4,000 to keep up. Someone else sees how profitable the industry is and soon, 12 competitor schools have opened up and FMF Airways is barely breaking even on its flight attendant training programs. But being resourceful company that it is, FMF Airways innovates, makes its school better, and manages to maintain its school section as a (slightly) profitable enterprise. Still, FMF Airways is saving the cost of training the attendants.
Okay. 4 months later, sh76 Airlines opens operations in the country. By now, the economy has improved and instead of getting 10,000 applications for 100 spots, we get 362 applications for 100 spots. Of those, roughly half are eliminated as unqualified, leaving about 2 applicants per job opening. However, we notice that the best trained applicants are going to FMF Airways because it's been around longer and has such a sterling reputation (and, of course, since FMF is so magnanimous about its employee benefits).
So, sh76 airlines starts a pilot program in which we will subsidize an applicant's training if she will promise to work for us for 5 years after finishing school. After trying this for a year or so, we decide instead to move all of our training in house. Sure, this cuts into our profits. But hey, between stiff competition from FMF, KmaxAir (motto: "Clever in-flight entertainment, even if you can't always understand what we're talking about" ) and AthousandYoung Skyways (motto: "Do you really want to know?" ), it's pretty much either seek this competitive advantage or go out of business.
Soon, Kmax and ATY follow suit and everyone but FMF Airways is now offering in house training to recruits. Profit margins in the country's airline industry are now razor thin; but hey, they can make it up by charging rest room fees, booking reservation fees, non-white smile fees and making passengers over 160 lbs pay extra fuel fees.
So, to maintain its competitive edge, FMF has to re-start offering in house training to its flight attendants. The entire training empire built up by FMF is now virtually worthless since demand for paying for training that would otherwise be free has dried up. The shareholders, annoyed at the enormous loss taken by FMF on its education subsidiaries, deposes the once great leader; who then goes to become an economics and political science professor at the Telerion School of Economics, under Dean Palynka.
All kidding aside, your scenario certainly is realistic. But it's a scenario that can also be kept in check by the free market. I know you didn't bring up this issue, but I don't think this is the sort of scenario that requires government intervention to prevent.