Unions Bear Down on Boeing

I have been disheartened over the last few weeks to read how the National Labor Relations Board (NLRB) filed a complaint against Boeing, in an effort to stop Boeing from building a new plant to build its 787 Dreamliner in South Carolina.

Boeing 787 Dreamliner

Here’s the facts of the case: Boeing had a process in which they decided where to build a new manufacturing plant for their new airplane, and after negotiating with their union in Washington, decided instead to build the plant in the right-to-work state of South Carolina.  Being a right-to-work state doesn’t prohibit unions, it only allows workers to have the choice NOT to be in a union.

Now, before you come down on me and say that I hate unions or something, hear me out.  I think that unions have their place in a society.  In developing countries, unions can have a critical role in protecting members from harsh or unsafe work environments, and can have a positive effect on worker wages.  However, in developed countries, it seems to me like unions become less and less necessary, and often take things to unsustainable levels.  For example, unions had a part in bringing the Big Three automakers in Detroit to the verge of bankruptcy, demanding more than merely safe work environments and a working wage.  In the automakers’ case, unions contributed to an unsustainable business model. 

We are also seeing the effects of union excesses in public union fights in Wisconsin, Indiana and elsewhere.  High wages and oversized benefits led to (or, at the very least, contributed to) unsustainable state budgets, and led the Wisconsin legislature to seek to curtail collective bargaining rights.

Nikki Haley-thumbReaction to the NLRB’s complaint against Boeing has been quick and widespread.  South Carolina governor Nikki Haley (newly-elected in 2010) wrote a scathing op-ed in the Wall Street Journal, saying, “The actions by the NLRB are nothing less than a direct assault on the 22 right-to-work states across America.  They are also an unprecedented attack on an iconic American company that is being told by the federal government—which seems to regard its authority as endless—where and how to build airplanes.”

Is this another faceoff between union and non-union labor?  Art Laffer and Stephen Moore say the NLRB’s action is “a big deal.”  They say it’s the first time that “a federal agency has intervened to tell an American company where it can and cannot operate a plant within the U.S.”

But are there economic ideas at work here?  Sure.  There are 22 right-to-work states in the U.S. and 28 union-shop states.  The American Legislative Exchange Council (ALEC) released its “Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index” this year (here’s a link to a previous year’s index; you have to pay for the new one), and the 22 right-to-work states have outperformed the 28 union-shop states in almost every economic category.  RTW states are growing faster than union states (4.8 million people moved from union states to RTW states from 2000 to 2008).  Their gross state product has risen faster than union states (54.6% vs. 41.1%).  Personal income has grown faster (53.3% vs. 40.6%).  Their payrolls have grown faster than union states (4.1% vs. –0.6%).

Where will the idiocy stop?  Will the federal government begin to say that no company can move from a forced union state to a right-to-work state?  Will the federal government say that people cannot move from a forced union state to a right-to-work state?

If forced union states concede that a migration of people and businesses is happening (as they seem to be with this Boeing issue), then why don’t they change their policies to be more conducive to people living and working in their state, rather than trying to prevent people from leaving?

Question: What do you think about this Boeing issue?  Should the federal government intervene to save union states?