Machinists, SPEEA call for tax break accountability
OLYMPIA — They may be working in one of America’s most-profitable industries, but employees of Washington state aerospace suppliers are paid so badly, they can’t afford to feed their own families, rent their own homes or buy their own cars, representatives of Machinists Union District Lodge 751 told legislators in March.
A dozen aerospace workers — most of them members of District 751 and SPEEA — testified in favor of two bills being considered by the Legislature: One establishing wage standards for companies that take the tax money, and another that would require the Boeing Co. to maintain a set number of jobs in Washington state in order to collect its full share of tax breaks.
They were joined by experts from two national think tanks and five politicians — including Snohomish County Executive John Lovick and David Mastin, a former Republican legislator from Walla Walla — who told the House Finance Committee that Washington needs to do more to ensure that its citizens are benefiting from the generous tax handouts.
“No other state has given so much money with so few strings attached,” said Thomas Cafcas, a policy analyst with Good Jobs First, which studies state tax policies nationwide. “No other state gives such a large subsidy for so long without reevaluating it.”
The Finance Committee has not yet scheduled a vote on the bills. However, polling of voters shows that a strong majority would like to see accountability measures attached to the nation’s largest corporate tax giveaway.
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WAGES (HOUSE BILL 1786)
Machinists and SPEEA members testified on Substitute House Bill 1786, which would set a wage standard for companies that accept a share of the $8.7 billion incentive package.
Under the bill, companies could choose either to raise pay for workers with three years’ experience to the state’s median wage — currently $19.67 an hour — or give back the tax breaks, so the state could use that money to provide services to poverty-wage workers.
It’s a good bill, IAM 751 President Jon Holden told the committee.
Holden told the legislators that in 1983, the average Machinists Union member at Boeing earned $12 an hour, which was enough to raise a family with a middle-class lifestyle.
But three decades later, “we’re seeing jobs in the aerospace industry that pay $10, $11, $12 an hour doing work we were doing for $12 an hour back in 1983,” he said. “These kinds of jobs don’t grow your consumer base. They don’t support your communities.
“We shouldn’t be subsidizing profitable employers who then pay three-quarters of their workforce $10, $11, $12 an hour,” Holden continued. “I don’t think that’s good for our community. I don’t think that’s good for our economy.”
Rebecca Smith, the deputy director of the National Employment Law Project, agreed.
Almost 25 percent of all U.S. manufacturing workers now earn less than $11.91 an hour, Smith told the committee — yet states like Washington continue to pour public dollars into incentives with the idea that manufacturing jobs will boost their economies.
“This bill (HB 1786) aims at correcting that imbalance and delivering to workers and their communities the good jobs that we thought were part and parcel of that tax deal,” she said.
Rep. Mia Gregerson (D-SeaTac), the bill’s prime sponsor, told her legislative colleagues that elected officials have been too focused on the number of jobs companies can generate, without considering whether they are good, quality jobs.
House Bill 1786, she said, “is an attempt to define … what a family wage job means: They’re not standing in line for free food somewhere.”
Gregerson said there are companies in her legislative district that take the tax incentive while earning hundreds of millions of dollars in profits, yet more than 80 percent of their workers earn less than $15 an hour.
When your pay is that low, “you’re on the brink, you’re one paycheck away, basically, from homelessness,” Gregerson said.
“Is it the units of jobs that we care about, or is it the value of the income that they’re able to garner with these jobs?” she asked. “We must be bold, and we must say that we want jobs, but we don’t want jobs where people have to get three or four jobs, because they can’t support their family.”
JOBS (HOUSE BILL 2147)
John Lopez Jr., the president of Machinists Union Local Lodge 751-C, was among those testifying in support of House Bill 2147, which would require Boeing to maintain the number of jobs it had in Washington state in November 2013 — when the $8.7 billion tax package was signed into law — in order to receive its full share of the tax break.
“If the jobs stay, the tax break stays,” explained Rep. June Robinson, the bill’s prime sponsor. “If the jobs leave, the tax breaks incrementally go away. I think that’s fair.”
Washington legislators approved the $8.7 billion tax package in 2013 “with the expectation that new jobs would come to our state,” she said. “What we have seen since then is headline after headline about jobs leaving our state.”
Boeing has eliminated more than 3,000 Washington state jobs since 2013, and has announced plans to ship out nearly 4,000 more.
“This bill is about standing up and saying ‘OK, we extended this, let’s make sure we’re getting economic growth in return,” Robinson said.
Mastin, the former Republican lawmaker, told his former colleagues that four other states have approved aerospace industry tax breaks totaling $1.9 billion in recent years. In return, Boeing and other companies have committed to creating 14,000 jobs in those states.
Washington, however, has agreed to give Boeing and other companies $11.9 billion since 2003 — yet set zero job requirements in return.
“That’s something that needs to be addressed,” he said. “That’s something that’s wrong.”
HB 2147 sets a very low and easy-to-meet standard compared to what other states have demanded, Mastin said.
“The bill before you doesn’t even ask for a jobs increase,” he said. “It simply says that when the company is looking to meet these quotas in other states, that’s fine — just don’t take jobs from Washington.”
Nearly a half-dozen Boeing workers testified about how their lives have been harmed by the company’s decision to move their work to other states — or even Russian, where engineers have been handed 777X design packages that most thought would be done in Puget Sound.
Several engineers and techs said they’d been assigned to train their own replacements. Others said they’re not sure they’ll ever be able to find other aerospace work.
Barbara Hoyt said she sat in her dying husband’s hotel room last year, doing work on her laptop so her team wouldn’t miss an important deadline. Now, her computer support job is moving to Missouri.
“I don’t believe Boeing should be getting any tax cuts when they are blatantly taking jobs away from the people here,” she told the committee.
Lovick, the Snohomish County executive, noted that Boeing demanded wage and benefit concessions from workers — along with the tax concessions from Washington’s government — as part of a competition pitting state against state and worker against worker.
Lovick said he is supporting the union-backed bill to “make sure our tax dollars and the promised jobs stay in Washington.”
“I do not favor providing tax breaks and incentives for creating jobs in other states,” he said.
Lopez said the loss of engineering jobs is a big concern for Machinists like him, and he supports HB 2147.
“The intent of this legislation is a good thing,” he said. “It’s important to hold the Boeing Co. accountable. Other legislatures have developed legislation that holds the company accountable. We need to do this to stay competitive.”
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