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Thread: NLRB vs. Boeing = Politics vs. Economics

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    Banned Eric Stoner's Avatar
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    Default NLRB vs. Boeing = Politics vs. Economics

    This is a story widely ignored by the lamestream media. Under Obama the NLRB apparently has been given the power to substitute its judgment for that of Boeing management as to where it may locate production facilities. Last month the NLRB, at the behest of the IAMAW claimed that Boeing's decision to open an assembly plant in North Charleston, South Carolina violated the rights of its unionized workers in Washington. In doing so, the NLRB has given a unique and tortured reading of the 1935 Wagner Act and ignored decades of Supreme Court and NLRB rulings.

    It's no surprise that South Carolina is a right-to-work state where workers cannot be compelled to join a union. In September 2009, Boeing's workers in that state voted to end their representation by the IAMAW. At the time, the union accepted this defeat without a peep. Prompted by the same union the NLRB is claiming that moving businesses to right-to-work states, by itself, is evidence of unfair labor practices. If it stands, it will be an incentive for new businesses to start ONLY in right-to-work states.

    As part of its campaign, the NLRB has lied about what Boeing has done. It claims that Boeing has decided to remove or transfer work from Washington to South Carolina. The truth is that Boeing has ADDED 2,000 workers in Washington to build its new 787. Moreover, the IAMAW contract specifically gives Boeing the right to locate NEW production facilities whereever it thinks best. Boeing's existing assembly plant in Washington will continue to produce seven 787's per month while the South Carolina facility will produce three.

    The NLRB says that Boeings expansion into South Carolina is punitive and retaliatory because since 1995 the IAMAW has stopped production three times at Boeing's Washington plants. They ignore settled law, both Supreme Court and past NLRB decisions, that companies may take past strikes into consideration when making business decisions to minimize the risk of further disruptions.

    Proving that it is clueless about basic economics, and the current state of our economy, the Obama Administration is going after the world's largest aerospace corporation. Boeing is also our largest EXPORTER. It has 155,000 workers and its shares are held by union pension funds among lots and lots of other people.

    This current farce is actually symptomatic of the death throes of organized labor. The percentage of PRIVATE sector workers who belong to a union keeps shrinking. Thus the reliance of unions on the NLRB to do their dirty work when persuasion has failed. It also represents the never ending effort of organized labor to try and get around Section 14 (b) of the Taft - Hartley Act. That provision allows states to pass right-to-work laws.

    Obama has also virtually guaranteed a Senate that is both Republican and possibly filibuster-proof in 2013. Democrat Senators from right-to-work states are going to have a hard enough time as it is trying to get re-elected in 2012. Obama has compounded their difficulties. Maintaining the economic attractiveness of their states is going to be a major problem if the NLRB action stands.

    We've already seen Obama brush aside existing bankruptcy law to screw the secured creditors of GM and Chrysler. Now the NLRB is suing Arizona and South Dakota because they had the gall to amend their constitutions ( by large majorities ) to guarantee secret ballots in unionization elections.

    Frankly, who can blame unions like IAMAW and the UAW from seeking to become wards of the state ? They've seen what it has done for the AFT, NEA and AFSCME. Likewise, uncompetitive companies are forever seeking ( and too often getting ) subsidies, tariffs , import quotas and tax breaks.

    The NLRB action is just the latest example of Obama sacrificing the economy on the altar of politics.
    Last edited by Eric Stoner; 05-17-2011 at 10:30 AM.

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    Default Re: NLRB vs. Boeing = Politics vs. Economics

    Trying not to dwell on the political aspects versus the economic aspects, the gist of the NLRB ruling is that the opening of a new ( and non-unionized ) production facility in a right to work state constitutes 'retaliation' against union employees at an existing production facility in a union rules state who have exercised their 'right' to go out on strike. The resulting legal and financial ramifications of this NLRB ruling ... if not overturned on appeal ... will indeed influence the decision making process in corporate board rooms. Instead of expanding / relocating US production jobs from a union rules state to a right to work state, corporate bigwigs will instead decide to sidestep the entire issue by relocating US production jobs to South America / Eastern Europe / Asia thus making the NLRB ruling a non-factor.

    When that eventually happens, the economic effects are likely to be as follows. The unionized US workers in union rules states lose their jobs. The non-union would-be workers in right to work states do not get new / relocated jobs. The union rules states lose tax revenue. The right to work states go not get new tax revenue. The only winners are the corporate bigwigs and the stockholders of the corporation, who will both enjoy increased profits once the corporation reduces its' labor costs below even the reduced level of US right to work states via producing offshore, as well as enjoying additional savings re US corporate taxes, US environmental and worker safety compliance costs, US product liability costs etc.

    the WSJ had an interesting analysis ...

    (snip)A recent New York Times editorial justified the NLRB decision by arguing that unions are suffering from "the flight of companies to 'Right-to-Work' states where workers cannot be required to join a union." That's for sure, and quite an admission. We've been observing that migration pattern for years, but liberals have denied it's actually happening—until now.

    Every year we rank the states on their economic competitiveness in a report called "Rich States, Poor States" for the American Legislative Exchange Council. This ranking uses 15 fiscal, tax and regulatory variables to determine which states have policies that are most conducive to prosperity. Two of these 15 policies have consistently stood out as the most important in predicting where jobs will be created and incomes will rise. First, states with no income tax generally outperform high income tax states. Second, states that have right-to-work laws grow faster than states with forced unionism.

    As of today there are 22 right-to-work states and 28 union-shop states. Over the past decade (2000-09) the right-to-work states grew faster in nearly every respect than their union-shop counterparts: 54.6% versus 41.1% in gross state product, 53.3% versus 40.6% in personal income, 11.9% versus 6.1% in population, and 4.1% versus -0.6% in payrolls.

    For years, unions argued that right-to-work laws were bad for workers and for the states that passed them. But with the NLRB complaint, they've essentially thrown in the towel. If forced unionism is better for the economy of a state, why would the NLRB need to intervene to keep Boeing from leaving Washington? Why aren't businesses and workers moving operations to heavily unionized places like Michigan, New York, Ohio and Pennsylvania and fleeing states like Georgia, Tennessee, South Carolina and Texas?

    In reality, the stampede of businesses from forced-union states like Washington has accelerated in recent years. A 2010 study in the Cato Journal by economist Richard Vedder of Ohio University found that between 2000 and 2008 4.8 million Americans moved from forced-union states to right-to-work states. That's one person every minute of every day.

    Right-to-work states are also getting richer over time. Prof. Vedder found a 23% higher per capita income growth rate in right-to-work states than in forced-union states, which over the period 1977-2007 amounted to a $2,760 larger increase in per-person income in those states. That's a giant differential.

    So now the unions concede that this migration is indeed happening, but they say that it is unhealthy and undesirable because workers in right-to-work states are paid less and get worse benefits than the workers in union states. Actually, when adjusting for the cost of living in each state and the fact that right-to-work states were poorer to begin with, a 2003 study in the Journal of Labor Research by University of Oklahoma economist Robert Reed found that wages rose faster in states that don't require union membership.

    Employers that move away from forced-union states mainly do so not to scale back wages and salaries—although sometimes that happens—but to avoid having to deal with intrusive union rules, the threat of costly work stoppages, lawsuits, worker paychecks going to union fat cats, and so on.

    Boeing officials have admitted that their decision to build the new Dreamliner plant in South Carolina was due in part to the fact that the company could not "afford a work stoppage every three years" as had happened in Washington state over that past decade. (By the way, this is the comment the NLRB complaint cites as proof of "retaliation" against union workers.)

    Boeing is merely making a business decision based on economic reality. In fact, the company chose South Carolina for the new plant even though Washington has no income tax and South Carolina does. The two of us are often accused of arguing that income tax rates are the only factors that influence where businesses and capital relocate. Taxes certainly matter. But Boeing's move shows that taxes are not always the definitive factor in plant location decisions. In the case of Washington the advantage of its no income tax status is outweighed by its forced-union status. Lucky are the six states—Texas, Tennessee, South Dakota, Nevada, Florida and Wyoming—that are both right-to-work states and have no income tax.

    While there are only six right-to-work states that also have a zero earned income tax rate and three zero earned income tax rate states that have forced- union shops, their performance differences over the past decade (2000-09) are revealing. Of the nine zero income tax rate states, those six that are also right-to-work have grown a lot faster than the three with forced-union shops: 64.9% versus 53.8% in gross state product, 59.0% versus 46.8% in personal income, 15.5% versus 10.3% in population and 8.2% versus 6.9% in payrolls.

    The Boeing incident makes it clear that right-to-work states have a competitive advantage over forced-union states. So the question arises: Why doesn't every state adopt right-to-work laws? Four or five are trying to do so this year, and have faced ferocious opposition from the union movement.

    But that shouldn't stop state legislators in forced-union states from doing what's in their workers' best interests. They need to decide whether they want to continue to see jobs and tax receipts exit their states, or whether they want to adopt laws that afford their workers the right to join a union or not. The only alternative is to build a regulatory Berlin Wall around their borders to keep their businesses from leaving."(snip)

    from

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    Featured Member minnow's Avatar
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    Default Re: NLRB vs. Boeing = Politics vs. Economics

    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

    Giving "right to work" status credit for growth is like giving an alarm clock credit for the sun coming up in the morning. Six of the top 8 states listed as being best for retirees happen to be right to work states. Retirees moving from rust belt to sunbelt states increase the demand for housing, construction, and associated services. So, yes there will be economic growth in those states, with population shift being for such factors as climate, cost of living, tax rates, etc.

    The fat lady hasn't sung yet on latest from Boeing. Undoubtedly, there will be appeals. There is more to being a successful manufacturer than just finding the cheapest wages around. Boeing has already admitted that it erred in doing too much outsourcing in the B787 Dreamliner project. So, I don't think that just opening up a factory overseas is an automatic conclusion to this. If that is such an attractive option, then why didn't Boeing just go ahead and do it? Frankly, some things Boeing has done in the last few years puzzles me, starting with moving corporate HQ from WA state, to Chicago, IL. Supposed advantage was being closer to its customers. Maybe United Airlines, but not its Pacific basin customers where air transport demand growth rate is projected to be twice as much as other regions. Also, product liability laws in IL are more plaintff-freindly than WA, or most other states. Being on the losing side of a lawsuit can offset supposed labor cost gains.
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    Default Re: NLRB vs. Boeing = Politics vs. Economics

    Quote Originally Posted by minnow View Post
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

    Giving "right to work" status credit for growth is like giving an alarm clock credit for the sun coming up in the morning. Six of the top 8 states listed as being best for retirees happen to be right to work states. Retirees moving from rust belt to sunbelt states increase the demand for housing, construction, and associated services. So, yes there will be economic growth in those states, with population shift being for such factors as climate, cost of living, tax rates, etc.

    The fat lady hasn't sung yet on latest from Boeing. Undoubtedly, there will be appeals. There is more to being a successful manufacturer than just finding the cheapest wages around. Boeing has already admitted that it erred in doing too much outsourcing in the B787 Dreamliner project. So, I don't think that just opening up a factory overseas is an automatic conclusion to this. If that is such an attractive option, then why didn't Boeing just go ahead and do it? Frankly, some things Boeing has done in the last few years puzzles me, starting with moving corporate HQ from WA state, to Chicago, IL. Supposed advantage was being closer to its customers. Maybe United Airlines, but not its Pacific basin customers where air transport demand growth rate is projected to be twice as much as other regions. Also, product liability laws in IL are more plaintff-freindly than WA, or most other states. Being on the losing side of a lawsuit can offset supposed labor cost gains.
    Like the NLRB, you have ignored the actual facts. Boeing did NOT take any jobs away from the Washington area. It ADDED 2,000 workers. It chose to locate a new factory with new jobs in South Carolina. There was a lot more to their decision than just cheaper wages. Labor stability being a major consideration.

    If you do not want to credit lower taxes and right to work laws , how do YOU account for the growth in those states ? Especially when compared to sclerotic "Blue" states like Ohio, Michigan, Illinois, New York and New Jersey ?
    Idaho and North Dakota are not "Sun Belt" states and are not seeing this influx of retirees that you posted about. Florida and Nevada are both still in the dumper economically compared to many other low tax, right-to-work states so your theory has a few large leaks.
    Last edited by Eric Stoner; 05-18-2011 at 10:45 AM.

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    Featured Member minnow's Avatar
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    Default Re: NLRB vs. Boeing = Politics vs. Economics

    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

    Where in my post did I accuse Boeing of taking jobs away from WA? My point was that "RTW" is not the big driver for population shift that some people are making it out to be.

    If you'll read the last sentence in my 1st paragraph, I cite cost of living, tax rates, etc. as reasons besides climate that entice people to move to a particular state. The 6 "RTW" states that were in the top 8 choices to retire in: AZ, FL, NC, SC, TN, TX. This is anecdotal: My last visit to ID several years ago heard that several people moving into ID (Boise, Coeur D' Alene, etc) were moving out of CA.

    Yes, the rust belt states that you mention has lost several factory jobs, etc. Several of those were permanent closures because company no longer had the business to support leaving open. In GM case, its hard to ignore labor cost as a factor. Yet other factors, like failure to build vehicles that customers really wanted shouldn't be ignored either. Some companies have moved corporate HQ, or a key operating base to other states for reasons other than labor cost.

    I'm not totally discounting RTW status as a factor in economic growth in some states, I just think its being given too much credit.
    I'm right 96% of the time. I don't sweat the other 5% .......................

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