June 17, 2011
by Diana Furchtgott-Roth
It's a cloudy day in Seattle. On the road leaving the airport, one of Boeing's plants stretches out next to the highway, just before the cranes of the port.
I am in Seattle to speak to Women of Washington, a nonprofit women's group focusing on public policy issues, on why America isn't creating jobs and what to do about it.
Boeing is dominating the news here. On Thursday, it raised its growth forecast for airline traffic and aircraft production, estimating that airlines will need 33,500 new aircraft worth $4 trillion by 2030, up from last year's forecast for 2029 of 30,900 planes worth $3.6 trillion.
And this week Judge Clifford Anderson began hearing the charges brought against Boeing by National Labor Relations Board's acting general counsel, Lafe Solomon.
Boeing makes seven Dreamliner 787 planes a month in its plant in Everett, Wash. With a backlog of 850 planes, it has built another plant in North Charleston, S.C., to build an additional three planes a month.
Solomon has charged that Boeing's decision to expand production of its planes in North Charleston was made in retaliation for strikes at its Washington plant.
Solomon's charge was brought after a complaint from the International Association of Machinists and Aerospace Workers, which represents Boeing employees in Washington.
But Boeing has not laid off any workers in its Everett plant. It is employing more than 3,000 more workers in Puget Sound since it decided to build the additional plant in October 2009.
If the NLRB decides in favor of the union, higher unemployment will be a permanent facet of the American economy because more manufacturing plants will be located overseas.
Firms will be less likely to build plants in America if an unconfirmed acting general counsel of an obscure regulatory agency can rule their use is illegal.
Anderson is going through routine procedures of pre-trial briefings and document discovery. He's beginning what will probably be a two-year NLRB process, in multiple courts, costing Boeing and the government millions of dollars.
These are dollars that could have been spent by Boeing employing more Americans to build Dreamliners. Uncle Sam could using the dollars to pay down the deficit.
June Thornton, co-founder of Women of Washington, told me that she was afraid that Solomon's charge would have a chilling effect on employment there. "Businesses have to go where they will be prosperous," she told me.
The biggest losers are the unemployed in states that require workers to be union members if unions win representational elections.
States such as Michigan, with an April unemployment rate of 10 percent, and California, with a rate of 12 percent, will have a harder time attracting plants. New plant and investment is far more likely to come to right-to-work states.
If Boeing had decided to produce more Dreamliners in Mexico or China, the NLRB would likely have been silent. American companies go offshore without complaint, but can face millions in legal costs when they expand at home.
The HR Policy Association, which represents multinational corporations, stated in a friend of the court brief, "Should the ALJ uphold the Complaint, U.S. companies, like Boeing, that are able to expand and create more jobs in the current economic climate, may build their plants in non-U.S. locations to avoid the risk of Board litigation over a decision to locate new work in non-union facilities in the United States."
America's unemployment rate is 9.1 percent, and our economy created a paltry 54,000 jobs last month. Boeing needs to build more planes. Employment would be higher if we rewarded job creation at home, instead of penalizing it.
Diana Furchtgott-Roth, former chief economist of the U.S. Department of Labor, was a Senior Fellow at Hudson Institute from 2005 to 2011.
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