Cashing in on people's dreams

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 glamorous profession and an opportunity to earn quite reasonable money for their families.

I then train those 20 cabin staff which takes 3 months and is a not inconsiderable business cost - something frequently commented upon by shareholders. FMF Airways then hits on the idea of no longer offering inhouse training and instead inviting applications only from 'qualified cabin staff'.

All of a sudden, cabin staff training courses pop up all over the place - some 'accreditted', others not - and they soon find there are 2,000 would-be cabin staff who are eager and ambitious enough to pay quite high fees and sign up.

This training provision soon becomes a very lucrative sector. Indeed, FMF Airways itself - along with many of its shareholders with airline industry experience - set up training courses all around the country through subsidiaries.

Meanwhile, FMF Airways still only needs 100 new cabin staff in each recruitment cycle and now enjoys not having to bear the costs of training them. These costs have been transferred to the young, smart women, mostly from working class families, thousands of whom have no chance of getting one of those 100 positions, despite being 'qualified'.

So, let's take stock. FMF Airways has reduced its running costs. Its shareholders enjoy the increased profitability. A new training sector is spawned creating many business opportunities. Ordinary people are encouraged to stand on their own two feet by investing in their own skills and training rather than feeling entitled and being dependent on their employers.

Is this new business scheme an example of progress?

Originally posted by FMF
A hypothetical scenario.

No its a ponzi scheme that bankrupts expectations. The currency being misappropriated here are the expectations of the thousands of hapless trainees who may reasonably think that they are in with a shot only to find that they are neither likely nor well trained enough to ever get a job in that industry.

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 ...[text shortened]... dependent on their employers.

Is this new business scheme an example of progress?

I won't bother commenting. I suspect my response won't be one that you find acceptable and it will turn into stupid conflict because of this.

Originally posted by AThousandYoung
I won't bother commenting. I suspect my response won't be one that you find acceptable and it will turn into stupid conflict because of this.

Thank you for your response.

Originally posted by AThousandYoung
I won't bother commenting. I suspect my response won't be one that you find acceptable and it will turn into stupid conflict because of this.

self fulfilling prophecy no 4273. That will hardly breed confidence in yourself and your capacity to make erudite contributions now will it now! C'mon just take a few baby steps and then launch. You're worrying about what others think about you, when you're doing stuff instead of just doing it.

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.

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?

1. assuming the market is fully competitive - because the airline has reduced the costs of training these workers, it would have more money available to pay these workers a higher salary.

2. if FMF Airways trained its own staff, it would probably need to require that staff to work only for FMF airlines for a specific period of time - otherwise it would risk paying to train these people and then having them all skip off to a competing airline (let's call them Freeloader Express) once their training was complete. But if the training occurred at an independent school, all of the graduates would be able to choose whatever airline was offering the best deal.

3. Given that the number of applicants seeking cabin staff jobs greatly outnumbers the amount of actual cabin staff jobs in the industry, the cabin staff schools would likely set extremely high admission and grading standards so that only the most talented and hardest working people would get in and survive the rigorous training process. (I assume there's something especially glamorous (or high-paying) about these jobs - perhaps they all get an inside track on becoming a supermodel?). Almost all of the applicants would likely be weeded out very early on, freeing them to pursue a more suitable career path.

4. Scholarship programs could be made available for promising applicants who can't afford the tuition. The industry itself would probably chip in to cover some of this, and government programs would undoubtedly emerge.

5. Assuming a competitive marketplace, and full access to information by students and airlines about how effective given schools were at training and placing their graduates - over time, you'd see a crop of schools emerge with programs offering superior training at low cost -- it would be much better and much more efficient than anything that FMF Aiways (or any other airlines) had been offering by themselves.

The end result would be a better trained staff getting a higher salary, while the airlines would still be able to spend less, and consumers would see lower ticket prices and better service.

HOWEVER.....all of this assumes that you have a fully competitive marketplace, and everyone has full access to all information regarding prices, salaries, and quality. If these things are lacking, various problems emerge.

eljefejesus, your take on this would be interesting to hear.

Originally posted by Melanerpes
1. assuming the market is fully competitive - because the airline has reduced the costs of training these workers, it would have more money available to pay these workers a higher salary.

2. if FMF Airways trained its own staff, it would probably need to require that staff to work only for FMF airlines for a specific period of time - otherwise it would garding prices, salaries, and quality. If these things are lacking, various problems emerge.

This scenario is not hypothetical at all. It happens in Britain in the legal profession for example, and I know it is happening with masters degrees in Forensic Science. I am sure there are many more examples. People are willing to pay high fees and take a lot of risks in the expectation of well paid, satisfying careers at the end. The colleges increase places to meet demand. But the demand for work has bog all connection to its supply in the marketplace. So an awful lot of graduates from these "vocational" "useful" courses are working in bars and restaurants on minimal wages, nursing impossible debts and dashed hopes.

Conversely, in less popular lines of work (like Environmental Health and Social Work) it is hard to recruit because not enough people are willing to take on the burden of paying for their own post graduate education in order to end up in a pretty unpleasant and not very well paid career.

Even relevant and useful qualifications fail to secure a fair return. There is a huge growth in management courses and qualifications but astonishingly, it is rarely a requirement that managers have management training or qualifications and often the qualifications are dismissed as incidental. Our current managers don't have any and they don't see the need.

Britain certainly is investing stupid sums to get people into higher education, while failing to maintain employer sponsorship of the training that is actually needed. 18 year old school kids are hardly going to put all their limited assets (main asset being the opportunity to borrow huge sums for fees and living) into working for anything less than a glamorous prospect, however competitive and hence unrealistic.

Originally posted by finnegan
This scenario is not hypothetical at all. It happens in Britain in the legal profession for example, and I know it is happening with masters degrees in Forensic Science. I am sure there are many more examples. People are willing to pay high fees and take a lot of risks in the expectation of well paid, satisfying careers at the end. The colleges increase pla ng for anything less than a glamorous prospect, however competitive and hence unrealistic.

these seem to be the sorts of problems that emerge when people lack the info or judgment needed to properly evaluate their options.

an example would be all those "management courses" you describe - if the employers that hire managers don't care whether or not the applicants have taken these courses, the courses are essentially a total waste of time and money for anyone taking them. So why are there so many fools still taking these courses?

In a world where everyone had perfect information and judgment, in order to stay in business, the schools providing these management courses would have to make changes until the courses provided students with enough of "a real inside track to plum management positions" to make the tuition worthwhile.

mgrs in UK don't get MBAs?

Originally posted by zeeblebot
mgrs in UK don't get MBAs?

why would a mugger want an MBA???? They have a far more direct way at getting at the money surely!

Originally posted by Melanerpes
an example would be all those "management courses" you describe - if the employers that hire managers don't care whether or not the applicants have taken these courses, the courses are essentially a total waste of time and money for anyone taking them. So why are there so many fools still taking these courses?

Maybe, just maybe, people take courses to LEARN things about management.

People take courses in pluralism and civics and sociology and Greek architecture in college even though none of those things are going to be necessary to gain employment. They do it for knowledge.

I've taken CE courses that I didn't need for credit to LEARN methods and strategies about the job I have.

Short answer: no.

Long answer: no, the increased barrier for getting the training required will mean fewer people can get the job. This means the airline has a reduced pool of workers to choose from. As a result, wages will increase and labour productivity will drop. This will increase the gap between the educated and the uneducated, and the airline might even have to bear increased costs because of the negative effects on wages and productivity.

Originally posted by kmax87
No its a ponzi scheme that bankrupts expectations. The currency being misappropriated here are the expectations of the thousands of hapless trainees who may reasonably think that they are in with a shot only to find that they are neither likely nor well trained enough to ever get a job in that industry.

Reminds me of the course i took at a local Community College on "How to Become a Private Dick". And that was after i spent $40K per semester at the University of Pennsylvania to be a Philosopher.

GRANNY.