Unions: Despite incentives, aerospace wages falling

SEATTLE — Nearly 38 percent of non-Boeing aerospace manufacturing workers in Washington are paid less than $15 an hour, according to a review of Washington State Department of Revenue data.

AIMsigns (2)The number of low-paid aerospace workers is climbing, the data shows, even as profits in the industry soar.

This shows why the Washington Legislature needs to act on the Aerospace Tax Incentive Accountability Act, said Larry Brown, the legislative director for Machinists Union District Lodge 751. “Our Legislature approved the nation’s largest tax-incentive package with the idea that it would lead to more family-wage jobs in our state, but the data shows that the exact opposite is happening.”

District 751 and SPEEA reviewed data that the state’s Revenue Department collects from companies that file for preferential tax rates available to Washington aerospace companies under a 2003 law. That law, which provided $3.2 billion in tax benefits to the Boeing Co. and its suppliers, was extended by the Legislature in 2013 as part of an effort to convince Boeing to build its 777X in Everett.

The extended package of tax benefits, now worth $8.7 billion, represents the largest corporate tax-giveaway in U.S. history.

What the data shows will be surprising for anyone who assumes advanced manufacturing companies provide good, middle-class jobs, Brown said.

“Pay for Boeing workers is good,” Brown said, noting that the average IAM 751 member at Boeing makes $30 an hour. “But pay for workers at Boeing suppliers is anything but good. Many of them are trapped in poverty-wage jobs, especially at non-union companies.”

That unions’ review of the data showed that 38 percent of the manufacturing workers at Boeing suppliers receiving the tax benefits — more than 5,600 Washington state residents in all — were paid less than $15 an hour in 2012, which was the most-recent year for which data was available.

That number has been on the rise, the data showed. In 2009, there were roughly 3,300 Washington state aerospace workers paid less than $15 an hour.

Wages fell even though industry-wide profits were soaring. For example, Boeing’s revenues grew 20 percent between 2009 and 2012, while its profits grew 34 percent and its orders backlog grew by 23 percent to $316 billion worth of airplanes — which was a record. Both Boeing and Airbus — the other major aircraft manufacturer that many Washington state companies provide parts and services for — recorded big increases in aircraft deliveries in those years; Boeing deliveries jumped 25 percent, while Airbus deliveries were up 18 percent.

The trends have continued, with both Boeing and Airbus reporting record deliveries for 2014.

“Clearly, the industry is booming, so it’s natural to assume that wages would be rising across the board,” Brown said. “But the data shows that is not the case, even though our state has invested tens of millions of dollars in aerospace worker training programs and billions in tax incentives.”

Brown said aerospace workers making less than $15 an hour are barely able to support themselves, let alone a family. They simply cannot survive without public assistance: food stamps, subsidized housing and medical care and free school lunches for children. A recent University of Oregon report estimates that citizens of that state pay $1.7 billion a year for services that keep low-wage workers and their families alive.

“There are those who think that any job is better than no job,” Brown said. “That’s a philosophical argument, but as a public policy question, we really have to ask ourselves whether it makes sense for our state to invest billions to create jobs that require billions more in public spending.”

LivingWageSignUnder the tax incentive accountability legislation being promoted by the unions, companies would have to meet a wage standard before they could claim a share of the tax benefit.

In addition, large aerospace companies would be required to maintain a specified level of jobs in Washington, in order to fully benefit from the tax incentives.

Since the $8.7 billion incentive was approved in November 2013, total Boeing employment in Washington has fallen by close to 1,500 workers. Since 2013, Boeing has announced plans to move the jobs of more than 6,300 Washington residents to other states — nearly all of them aerospace engineering jobs that pay an average of $107,000 a year, according to the state’s Employment Security Department.

“As it stands, the law allows Boeing and its suppliers to use Washington tax dollars to move good-paying jobs to other states while keeping poverty-wage jobs here at home,” Brown said. “Clearly, that’s not what the Legislature had in mind, and it needs to act to fix this.”

Brown said he’s optimistic that the legislation promoted by the unions will at least get debated and voted on in Olympia this year.

“We’re seeing strong support, much of it bi-partisan,” he said.

Originally founded in 1935 to represent hourly workers at Boeing, District Lodge 751 of the International Association of Machinists & Aerospace Workers now represents more than 33,000 working men and women at 51 employers across Washington and California.

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  1. […] on wages: Boeing’s touch-labor union, the IAM 751, says a Washington State study about aerospace jobs shows 58% of non-Boeing aerospace jobs in the state are paying less than $15 […]



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