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What if Boeing left Washington? (Who said, ‘Again?’)

Post by News Tribune Staff on April 14, 2009 at 12:01 pm with No Comments »
April 14, 2009 12:01 pm

The Washington Research Council just issued a report today. It was hired by the Washington ACE (Alliance for a Competitive Economy).

Well, for one, Boeing has a multiplier of 4 jobs for every Boeing job. That is, there are 3 other jobs for every Boeing. So, if all 72,000 Boeing employees were to move to South or North Carolina or Texas, Washington would lose 285,000 total jobs, according to the report.

And whoever asked, “Again?” just remember: it was only the headquarters that Boeing moved to Chicago.

Of course, it’s no coincidence that this report should come out now. Boeing is being wooed by other states and makes no secret that in many ways other states have more to offer than Washington does.

The report that leaked out last week basically said to make Washington more competitive with other states, Washington would have to change its unemployment benefits, injured worker benefits and collective bargaining laws to tilt the field away from workers and more decidedly in Boeing’s favor.

(I’m sure David Groves at the Washington State Labor Council will resend his raft of e-mails in response to this posting. Then, I can link to them again.)

Boeing appears to be batting .500 this session. They won when the Worker Privacy Act died, but lost when the House passed that bill to restore the pre-2003 formula for computing weekly unemployment benefits. I’m not counting the state Department of Boeing bill yet because it is more window dressing than substance and I’m not even sure the aerospace industry gives much of a hoot.

(BTW, Boeing doesn’t like to bat only .500. That’s a decent season for the Mariners but downright crappy for the aerospace league.)

Here is a link to the whole report.

And here is last week’s missive from the Labor Council, with its observations on an earlier consultant’s report that says how poorly we stack up against the Carolina Panthers, or something like that. It’s for balance.

Consultant’s competitiveness report, recommendations deserve skepticism

Last month, in order to ensure that future jobs at Boeing and other aerospace companies stay in our state, Gov. Chris Gregoire announced that she wanted an analysis of how Washington stacks up against other states in terms of business competitiveness on the costs of unemployment insurance, workers’ compensation, taxes, and labor costs.

Yesterday, the “Aerospace Industry Competitiveness Study” prepared by Deloitte Consulting was made public. It contains some positive news about Washington’s competitive advantages: the availability of our skilled labor force, our competitive tax environment, our access to research and development, and our excellent quality of life here.

Topping the list of bad news: we make too much money. Other “competitive disadvantages” identified by Deloitte included contentious labor relations (read: strikes), inadequate training programs, and our relatively high cost-of-living.

The study compares Washington to four states deemed to be our aerospace competition — Texas, North Carolina, South Carolina and Kansas. All happen to be states with so-called “right-to-work” laws banning free bargaining on union-security clauses. There is a clear and indisputable correlation between these right-to-work states that actively discourage unionization, the resulting low union membership rates, and low wages and benefits. These low wages are good news for short-sighted corporate consultants for whom labor is merely a cost. But low wages are bad news for you and me. They’re bad for our families, our communities, and all of the businesses and governments that rely on our consumer spending.

Much of the above comes as little surprise, even to those of us who don’t work for fancy schmancy consulting firms. The real problem with this report is when Deloitte slips on its legislative lobbying loafers — “Hey! Those tassel-toed shoes look familiar!” — and recommends what to do about it.

Deloitte’s recommendations include cutting benefits for unemployed and injured workers in our state, and granting more aerospace tax incentives.

Sound familiar? It should. It conforms precisely to the legislative priorities of The Boeing Co. this year, in years past, and in years to come. That’s no accident. One can’t help but wonder why the study was leaked early before Gov. Gregoire’s scheduled aerospace press conference that wasn’t supposed to happen until next week. What’s certain is that its release will now affect the outcome of legislation on unemployment insurance and workers’ compensation being voted upon as you read this.

Deloitte’s recommendations are nothing more than Boeing’s legislative priorities. Period.

Boeing is one of Deloitte’s biggest corporate clients. In 2003, then-Gov. Gary Locke hired Deloitte to justify an “eye-popping” $3.2 billion Boeing tax break and dramatic cuts in unemployment and workers’ compensation benefits. After the dust settled, the conflict of interest between Deloitte and Boeing was made public in media reports.

Now here we go again. Our state has hired the same bunch of Boeing insiders to “objectively” assess our competitiveness. And guess what? They have concluded that we should again cut their taxes and again cut the safety nets for workers, both of which will help them make more money.

But it gets worse than that. Deloitte also includes in its recommendations the deliberately deceptive talking points of Olympia business lobbyists. Deloitte’s recommends that Washington “align workers’ compensation benefit levels (and thus cost to employers) with competing states.” This reference to benefits, as opposed to employer costs is deliberately misleading. Although it’s true that our benefits are above-average, the cost to employers is demonstrably lower.

In truth, the only independent state-by-state analysis of workers’ compensation systems out there, which is conducted by the Oregon Department of Consumer and Business Services, found Washington to have among the cheapest employer costs. Our aerospace “competitors” in South Carolina had the 13th highest costs, Texas ranked 17th and North Carolina 22nd. Washington ranked 38th.

So why is Deloitte recommending that Washington cut benefits to injured workers? To widen our already existing competitive advantage? Nope. Here’s why.

HB 1402 would limit ex-parte communication between employers and injured workers’ doctors during the workers’ compensation appeal process. This labor-supported bill passed the House and was poised for a floor vote in the Senate this week. But it is opposed by Boeing and other business interests.

Enter Linda Lanham.

Lanham is the Aerospace Futures Alliance. She runs it out of her home and is its sole employee. She is funded primarily (if not exclusively) by Boeing. Her job is essentially to lobby for aerospace interests during the session, and in the interim, to host fancy breakfasts and lunches where Boeing executives remind the invited lawmakers and reporters that “location is a choice.” (Also, she’s currently exploring creating an aerospace Retrospective Rating Group. But that’s another story.)

Apparently, Lanham saw the Deloitte report before the rest of us. Rumor has it that she knew it included the aforementioned recommendation to rein in benefits for injured workers, so she sought to delay this week’s Senate vote on HB 1402, hoping the report would sway a few Senators against the bill.

Alas, although the Deloitte report was leaked on Thursday ahead of its scheduled release (Gov. Gregoire had originally planned her press conference for next week but moved it up to Thursday after the report came out), it was not leaked before the Senate went ahead and voted Wednesday, 29-18, to approve HB 1402.

The point is that Boeing/Lanham and other business lobbyists will use this Deloitte report — essentially written by them, for them — to try to get the same thing they got in 2003. Because this report includes “recommendations” for public policy, and because those recommendations are identical to aerospace industry lobbying goals, there are legitimate questions about the circumstances of its preparation and the timing of its release. In addition to the unemployment and workers’ compensation bills now in play that stand to be affected, the Blank Boeing bills (SB 6117 and HB 2308) continue to hover ominously, awaiting who knows what?

The Washington State Labor Council supports the goal of maintaining and growing aerospace jobs in our state. We will judge each and every idea to accomplish that goal on its merits, and our support or opposition will be guided by our affiliated unions, which include Machinists District 751 and SPEEA/IFPTE 2001. There will likely be proposals — related to worker training and transportation, for example — that the Council would be inclined to support.

But the WSLC urges all legislators to view Deloitte Consulting’s recommendations with the skepticism they deserve.

State Government
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