Unions prepare aerospace tax break accountability act

OLYMPIA — Machinists Union District Lodge 751 and SPEEA continue working together on a plan to ensure that last year’s $8.7 billion aerospace tax incentive package actually grows Washington’s aerospace industry.

JLARKLarry2The unions have hired legislative consultants who will help them draft what they’re calling the Aerospace Tax Incentive Accountability Act. They’re also setting up meetings with key legislators from both parties to explain why changes are needed to last year’s legislation.

“Tax incentive packages should reward companies for creating good-paying jobs in our state,” said IAM 751 Legislative Director Larry Brown. “As a union, we think that’s a good investment of our state’s tax dollars.

“Unfortunately,” he continued, “the law as it now stands rewards companies that use our tax dollars to create good-paying jobs in other states, and poverty-wage jobs here.”

The $8.7 billion tax incentives package — the biggest ever in U.S. history — was tied to Boeing’s decision to assemble the 777X here in Washington. District 751 supported the tax proposal at the time.

But the law as passed contained huge loopholes that allowed the Boeing Co. and its suppliers to essentially take our money and run.

Since Gov. Jay Inslee signed the $8.7 billion package into law, Boeing has laid off 350 engineers, announced plans to move thousands of engineering jobs out of state, and said it will use robotics to reduce the number of Machinists needed to build 777s in the future.

“We don’t think Boeing should get tax dollars for shrinking our state’s aerospace industry,” Brown said.

“The Legislature’s intent last year was to use tax incentives to grow Washington aerospace,” he said. “But to do that, we must maintain good engineering jobs. That brainpower is an essential part of our aerospace cluster, and it’s a big part of our state’s competitive advantage.”

AIMRally2At the same time, Boeing suppliers continue to pay poverty wages. For example, before they ratified their first union contract this year, workers at AIM Aerospace in Sumner were paid on average less than $13 an hour, a wage so low it forced a large percentage of them to rely on food banks, food stamps and taxpayer-subsidized public housing to survive. Their children got free lunches at school, and state-provided free health care as well.

“Workers in our state’s largest industry shouldn’t have to live like that,” Brown said. “And it’s not right for our citizens to have to pay tax incentives to these companies when they’re already paying out tax dollars for public assistance programs that keep these low-wage workers alive.”

The proposed Aerospace Tax Incentive Accountability Act would ensure that aerospace companies must employ a specified number of people in Washington state to receive a full share of the tax breaks — just like Boeing agreed to create at least 3,800 jobs in South Carolina when it opened its Charleston plant, in exchange for an estimated $900 million tax break.

In addition, the proposed Accountability Act would require a minimum wage standard, which will likely be $15 an hour.

“A $15-an-hour wage would get a family of four a little above the poverty line,” Brown said. “They could buy their own groceries, and school supplies for their kids.”

The Accountability Act would put reasonable restrictions on companies that are enjoying a share of the largest corporate tax breaks in U.S. history, Brown said, and it would protect Washington state’s investment in the aerospace industry.

“We’d like to see Washington aerospace companies earn every penny of that $8.7 billion,” he said. “But we as a state should get something in return. Otherwise, it’s not an incentive, it’s just a hand-out.”

Originally formed in 1935 to represent hourly workers at Boeing, District Lodge 751 of the International Association of Machinists & Aerospace Workers now represents more than 32,000 working men and women at 51 employers across Washington and California.

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