USAirways Shuttle Shrinks

http://www.futureofcapitalism.com/2009/12/usairways-shuttle-shrinks

USAirways will eliminate 261 jobs at La Guardia Airport as it scales back its shuttle service between New York, Boston, and Washington, switching to 99-passenger Embraer regional jets from 124-seat Airbus jets, the New York Times reports. The Times reports toward the end of the article that Amtrak's Acela train service "has been cutting into the shuttle ridership," but it doesn't make the explicit connection between the $1.5 billion a year in taxpayer money that Congress spends on Amtrak and the loss of the 261 jobs in New York. The thing about government spending is that it has a way sometimes of competing with private enterprise. Amtrak will argue that Acela is profitable and that the subsidy goes to less-traveled, lower fare routes, but USAirways has less-traveled routes, too, that may attract government subsidies in various ways, but not at the level of a $1.5 billion annual direct appropriation. If Acela is profitable, why does the government need to run it, anyway? Why not sell it off? Anyway, the next time Congress has a hearing on funding for Amtrak, it would be nice to invite some of the 261 laid off USAirways employees to testify about whether their tax dollars should be spent subsidizing a firm that competed with their company so effectively that it put them out of their jobs. We're not suggesting that the USAirways employees are entitled to perpetual employment, but it's worth remembering as the government ponders job creation programs that sometimes when the government tries to create or preserve jobs, such as the ones at Amtrak, the government action has the additional consequence of destroying other jobs, such as the ones at USAirways.

by Editor  |  Dec 7, 2009 at 9:40 am Related Topics:  Press receive the latest by email: subscribe to the free futureofcapitalism.com mailing list