In a vote last month, union machinists at Boeing rejected a multi-year contract to build the new 777x jetliner, choosing workers’ rights and dignity over a paycheck. The International Association of Machinists District 751 states that it will not accept a proposal that would have gutted workers’ pensions and reduced health benefits. The eight-year contract unilaterally proposed by Boeing — considered extremely long in the larger context of U.S. labor relations, where most contracts are less than 5 years — would have prohibited the union from striking and from negotiating for higher wages to keep pace with inflation. More importantly, it would have frozen the pension system that they had bargained for over the last several decades, and entirely ended the pension system for new hires. That security system would have been replaced with a long-term savings plan that shifts all risk to the workers.
Boeing responded by threatening to move production to a nonunion state, which is why Washington has offered this iconic aviation company the largest state tax subsidy in U.S. history ($8.7 billion over the next 16 years), prompting union leadership to urge a yes vote. Boeing’s stance is not only a disturbing rebuke but also another indication of corporate America’s belief that workers should not share in the prosperity of the companies they have made successful.
By turning down Boeing’s lopsided proposal, the Machinists stood up to defend the middle class as well as the standard of living in our communities. It is clear that the middle class is under attack, facing unprecedented income and wealth inequality; meanwhile, Boeing has posted historically high profits. It is also estimated the pension for Boeing’s CEO is worth more than $250,000 per month.
The decline of unions in the United States is not a new story. Yet in distinction from Ford, General Motors and Chrysler — long-struggling companies kept afloat by government aid — Boeing reported a $3.9 billion net profit last year. In a nation that has largely deindustrialized, where the big bucks are in finance rather than factories, Boeing stands as a lasting symbol of American manufacturing might. It is also a central component of the military-industrial complex, building aerospace machinery the gives the U.S. its unrivaled military status in the global arena. Boeing’s only legitimate competitor in the civilian market is the European company Airbus.
Boeing’s decision to fight its own talented machinists is disappointing on multiple levels. But above all, it raises some terrifying prospects about U.S. capitalism in the 21st century. We are witnessing a trend where instead of industrial growth translating into widespread national prosperity, the American companies increasingly subscribe to what economists call the “Iron Law of Wages,” which holds the most logical price for labor is subsistence. In other words, the theory suggests that the only sensible and natural pay for workers is a level allowing them to survive and work to produce value for owners – and nothing more.
This violates the central principles we associate with the “American Dream” — the belief that Americans who work hard and contribute to society should be rewarded with a good life, including the opportunity for home ownership and the ability to provide for a family, be secure in retirement, and perhaps take a vacation now and then.
Over the years, the attorneys at Emery Reddy have proudly served Boeing machinists in legal matters involving workers’ compensation claims, employment law, third party injury claims, and more. Most importantly, we have come to know the integrity of these workers on a personal level, and have seen first-hand the tremendous contribution they make to their company and the Puget Sound region more generally. Critics who argue that unions are a threat to U.S. economic competitiveness completely miss the point of the machinists’ stand against Boeing management. The machinists only ask that this profitable and robust company — an enterprise that owes a considerable degree of its success to the largesse of Washington taxpayers — share its profits more equitably with the workers responsible for building its products. If these employees benefited more directly from Boeing’s success, they would also have more to spend, which (as is true in all cases) would provide additional benefits to the U.S. economy.
In light of the dedication of these workers and the profitability of the company they serve, it’s hard to see how any American worker can get a fair labor deal if Boeing’s workers are denied one.