An American Airlines jet is prepared for a flight at O'Hare Airport. Getty Images

Wall Street analysts hate the idea of paying workers

JP Morgan's Jamie Baker was even more scathing than Crissey. "We are troubled by AAL's wealth transfer of nearly $1 billion to its labor groups," he wrote, suggesting that the move was not just contestable as a matter of business strategy, but somehow obviously illegitimate. The argument from American's managers and unions, by contrast, is that the raises are a question of basic fairness and long-term sustainability. The ups-and-downs of various bankruptcies and mergers had created a situation where American was paying pilots and flight attendants less than its direct competitors Delta and United. Now that American had emerged from bankruptcy and was profitable again, that created an obvious morale problem. What's more, while the unions had no way to force a raise in 2017, the collective bargaining agreement is set to expire in two years, so ultimately a showdown was inevitable. By that view, the raise represents American making a demonstration of good faith to its workforce to keep people happy and set the table for an eventual negotiation. Baker, however, takes a darker view, saying that not only does the raise increase costs, it "establishes a worrying precedent, in our view, both for American and the industry."

Labor's share of income has been declining

Baker is certainly correct that for workers to get a larger slice of the pie would be a dramatic new precedent relative to recent trends. As a report last year from the Organization for Economic Cooperation and Development shows, in both the United States and other rich countries workers as a whole have been receiving a smaller and smaller share of national income. Noah Smith of Bloomberg View recently wrote a column summarizing the various main theories professional economists have about why this is happening — monopoly power, global trade, robots, and landlords are the leading contenders for villain . It's less quantifiable, and thus not-beloved by academic economists, but my personal view is that what amounts to a management fad for treating workers poorly is an underrated factor here. The beating American took in the stock market — and the outraged tone of the analyst letters — is a clear sign of the constant pressure that modern companies are under to be as stingy as possible with their workforce. Combine that pressure with what amounts to a 16-year span of objective labor market weakness and you have a whole cohort of corporate executives who've probably never even considered the possible merits of a different approach. And as we're seeing, those who do are smacked down immediately. A company like Apple that thinks nothing of investing money in environmental or accessibility initiatives would never dream of taking a similarly high-minded attitude toward labor issues, even though it obviously could make Apple Store retail employees as well-paid as any manufacturing worker from the "good old days" if it wanted to.

Low pay leads to collective economic weakness