"Unions - Do They Understand Competition is Global?"

Sydney M. Williams

Thought of the Day

“Unions – Do They Understand Competition is Global?”

May 2, 2011

The President’s tacit endorsement of the decision by the National Labor Relations Board (NLRB), to charge Boeing with violating labor laws in initiating a production line for the 787 in South Carolina indicates how out of touch he is with the economic problems that produced so feeble a recovery and that has kept unemployment so high.

In October 2009, Boeing announced that a second assembly line for the 787 Dreamliner would be opened in South Carolina. A year ago, the International Association of Machinists and Aerospace Workers (IAM), which represents 35,000 Boeing employees (out of 157,000 employees,) initiated an investigation into Boeing’s decision to construct a second assembly line for the 787 Dreamliner in North Charleston, South Carolina. The investigation remained dormant until President Obama appointed Lafe Solomon as general counsel to the NLRB in January of this year. Not surprisingly, Mr. Solomon filed a complaint. He claimed that Boeing would be violating federal labor law by opening a production line in South Carolina, a “right to work” state. Interestingly, Mr. Solomon took this action without having been confirmed by the Senate, as required by law.

On June 13 a hearing is scheduled in Seattle before an administrative law judge. Not being a lawyer, I have no idea as to the merits of the suit. However, the Seattle Times on April 29th stated: “Two 1965 U.S. Supreme Court cases affirm employer’s right to consider potential strikes in making business decisions.” The suit seems to me to be a case of hope over experience.

While union membership in the private sector has been in decline for four decades, public sector unions have been on the rise. Union bosses, fearful of what they see in deficit-ridden states, have become increasingly adept at poisoning their members (and some in the press) against the rational recognition that their demands have been integral to the deteriorating financial conditions of their employers – be they private or public. In response, twenty-two states have initiated “right-to-work” rules, freeing workers to decide for themselves as to whether to join a union. At least five other states – Indiana, Michigan, New Hampshire, Ohio and Wisconsin – are considering such action.

The NLRB’s complaint (and the President, in his silent acquiescence of Mr. Solomon’s decision) is pitting states that tolerate unions, but don’t force workers to join, against those in which workers have no such rights. The momentum toward “right-to-work” rules may well hang on the June decision in Seattle. An adverse ruling would damage Boeing’s and other businesses ability to compete in today’s global environment. The effect would be lower overall employment and less revenue in state’s coffers. The attempt to keep live a system that benefits the few, at the expense of the many, is neither democratic nor practical in today’s economic environment.

South Carolina’s Attorney General Alan Wilson sent a letter – signed by a number of other states attorney generals – to Mr. Solomon: “This complaint represents an assault upon the constitutional right of free speech, and the ability of our states to create jobs and recruit industry.” That it does; as well it inhibits America’s ability to compete in a world, whether we like it or not, in which money is transferable and labor is replaceable.

At a time when national unemployment hovers just under 9%, a decision to let Mr. Solomon’s complaint prevail would be extraordinarily shortsighted. We can retreat within our borders, erecting barriers against trade, as was done in the 1930s, or we can act positively and aggressively, recognizing that to remain competitive we must focus on our intelligence, efficiencies and, yes, costs. The real competitors to the state of Washington’s IAM members are not non-union workers in South Carolina; they are skilled workers in places like China, India and Eastern Europe.