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Getting the Middle Class Out From Under Boeing’s Thumb

Amy Traub

You can explain the current plight of the American middle class in three sentences. Timothy Egan did in the New York Times this week:

This is how the middle class dies, not with a bang, but a forced squeeze. After a global corporation posts record profits, it asks the state that has long nurtured its growth for the nation’s biggest single tax break, and then tells the people who make its products that their pension plan will be frozen, their benefits slashed, their pay raises meager. Take it or we leave.

Egan goes on to describe how the State of Washington leapt to approve a record $8.7 billion in tax breaks to keep Boeing in the Seattle area. But when it came to job concessions that would dramatically downgrade the jobs of Boeing’s highly skilled manufacturing workforce, the Machinists Union overwhelmingly voted no. Egan compares the workers’ resistance to “the Alamo, Custer’s Last Stand, Braveheart” – a valiant but almost certainly doomed attempt to stand up for their own middle-class American jobs.

The highly profitable company could easily afford to offer its workforce a much better deal, but it also had the power not to. Companies like Boeing, which could step up and assert that they will keep faith with the region that nurtured them and the unionized workforce that has brought them tremendous profitability, are instead aggressively pursuing the race to the bottom. Political leaders are similarly turning their backs on the middle class.

Egan sees the Boeing story as illustrative of “the utter bankruptcy of economic policy prescriptions offered by both political parties.” Republicans offered mammoth tax breaks and deregulation, while Democrats served up an educated and skilled workforce, with public investment in training to suit Boeing’s personnel needs. None of it was enough. The company had the leverage to demand that middle-class jobs be devalued, so it did.

But surely policy doesn’t always need to crumple in the face of corporate power. The public, too, can make a demand. For a major federal contractor like Boeing, action could be taken at the executive level.  As my colleague Robert Hiltonsmith and I noted in a recent Demos study: “through the use of his executive power, President Obama has the authority to call for improvements in workplace standards among companies that do business with the federal government or get special benefits from federal agencies.” While our research focused on the potential to raise standards for the lowest paid federal contract workers, it is also worth exploring how job quality could be preserved for contract workers with high quality jobs they are in danger of losing.

At the same time, Congress could act to make it more difficult for companies to downgrade jobs, or strengthen the ability of working people to push back through their unions. If it was easier for unions to organize throughout the United States, for example, the lure of moving production to a factory in Texas or South Carolina would be dramatically reduced. And today yet we see a political push in precisely the opposite direction, with politicians fighting workers’ efforts to organize manufacturing in the American South even when the employer does not object. The effort is just one manifestation of a broader state-level “series of initiatives aimed at lowering labor standards, weakening unions, and eroding workplace protections for both union and non-union workers” documented by Gordon Lafer in a recent Economic Policy Institute report.

Leaving aside domestic policy, there are also policy options that would reduce a corporation’s power to blithely move jobs internationally in a global race to the bottom: if our trade deal were written to provide more power to workers’ organizations around the world, they could become a more effective tool for building the middle class globally. Instead, proposed trade deals, like the highly-secretive Trans Pacific Partnership, will move us aggressively in the direction of lower wages and fewer rights for working people (and more power for companies like Boeing).

A different set of policy decisions is possible. Yet, today’s political reality is even  worse than Timothy Egan envisions: not only are the political “solutions” being implemented inadequate to save middle-class jobs, but many political leaders are actively working to undermine the ability of working people to earn a decent wage.