Last week’s overwhelming vote by 31,000 Boeing workers to reject a contract making cuts in pension and healthcare benefits is a signal that the tide is turning against the neoliberal strategy of using the threat of outsourced production to intimidate Americans into giving up their social safety net.
Boeing floated a promise of job security for the next eight years by committing to produce its newest aircraft in Seattle and offered a $10,000 bonus for agreeing to the deal. However, the current contract would be terminated, a defined-benefit pension plan replaced with a 401k, and healthcare costs increased.
Jeffrey Johnson of the Washington State Labor Council writes in the Seattle Times: “Machinists were presented with a unilateral proposal that would have frozen the pension system that they had bargained for over the last several decades — it would have also ended the pension system for new hires. … It would have been unthinkable for grandparents or parents to sell out younger workers and future workers, many of whom are sons and daughters or nieces and nephews, and prevent them from earning a secure retirement future.”
According to the Washington Post, “Dian Lord, a toolmaker at Boeing’s facility in Renton who is nearing retirement, said Wednesday morning she believed the company was extorting its workers by pushing a swift contract vote while threatening to place 777X operations elsewhere if machinists don’t oblige. Still, Lord said she felt intense pressure to vote for the contract, especially considering that it could impact a variety of other Boeing workers and vendors should the company move elsewhere.”
The union leadership made no recommendation on the proposal until a packed meeting made clear that the membership overwhelmingly opposed it.
Reuters reports: “A crowd of more than 100 people erupted in cheers when the vote was announced amid a charged atmosphere at the union’s main hall in Seattle. … Even though the union’s 31,000 workers gave up their chance for [777X production] jobs, they considered the giveaways in the contract too grave to accept. … Voter turnout was high. Workers began lining up in predawn darkness on Wednesday outside the union hall in Everett, Washington and elsewhere in the Seattle area and in Oregon. … ‘It goes against everything that we’ve fought for over the years,’ said John Orcutt, 42, a 17-year union member and hydraulic tube bender.”
Boeing anticipated it could increase profits through confining wage increases to 1% annually for the life of the 777X project, reducing liabilities to retirees, and eliminating collective bargaining from the implementation of next-generation technology.
After the Boeing workers’ union was provoked into a 52-day strike in 2008, the company retaliated by moving work to South Carolina. The union dropped its complaint to the National Labor Relations Board about this illegal tactic when Boeing threatened to move production of another aircraft, the 737MAX, and demanded wage concessions in exchange for a guarantee that the plane would be built in unionized facilities around Puget Sound.
Jenny Brown of Labor Notes explains: “That contract saw a 70 percent yes vote and a generational split, with the over-50 workers voting no and the newer workers making only $15 an hour voting yes. The difference now is that, with the exception of those prepared to retire before 2016, everyone in the union is getting hit, hard. The younger workers lose out on a real pension, period. Anyone midway through their working years will lose a huge amount of the retirement income they anticipated. Medical costs will double or triple over the life of the extension, more than eating up the 1 percent raises. And the union membership will have no leverage against Boeing for 11 more years.”
The Boeing vote parallels Americans’ deep concerns about retirement and health coverage. This is why the reaction to the rollout of the Affordable Care Act (Obamacare) is complex: despite the mismanaged launch of the website, the public is not moved by Republican attempts to repeal the law. Its advantage for the uninsured and low-paid is security in their coverage: it disconnects insurance from employment, removing the obligation to stay in an exploitative job in order to keep healthcare; it eliminates annual and lifetime benefit maximums, and prevents insurers refusing coverage because of pre-existing conditions. This is why politicians in Republican controlled states, organized by ALEC, are planning to undermine the law at the state level. They want to promote insecurity and intensify dependence on employers while cutting the social wage.
Obamacare attempts to rationalize healthcare while preserving the dominance of insurance companies by rearranging risk pools while mandating individual coverage. The health insurance industry is now positioned to extract premiums from a much larger base, creating a division of right-wing opinion between ALEC-backed governors like Scott Walker in Wisconsin and states where Republicans receive major campaign contributions from health insurers. In Florida, for example, the industry is pushing the state to reverse its stance on Medicaid. The federal government is offering billions of dollars to finance Medicaid’s expansion, and insurance companies want a piece of that action. Florida Blue executive Patrick Geraghty told journalists: “We believe strongly that we ought to be taking that funding.”
Obama has lost credibility with the public, however, because of the hopes raised by his optimistic statements about his administration’s signature legislation and their contradiction with the cack-handed implementation of the website, together with his promises about keeping existing plans (and, by implication, doctors with knowledge of people’s medical history). That is why the website debacle has eroded the trust Obama was able to leverage in two elections.
It also illustrates the bankruptcy of market-based solutions to social problems. The political decision to expand health coverage by relying on a mix of incentives and regulations for entrenched insurance companies, rather than instituting a single-payer system, has multiplied the law’s complexity exponentially. A physician writes that “administrative costs make up more than 30 percent of our national health care bill, most of it unnecessary. The waste in this area alone is equivalent to around $400 billion annually. That is more than enough to provide health care to every uninsured person living in our country. Some of these costs result from the slicing and dicing of Americans into ever-tinier and more confusing categories, the inevitable result of applying the principles of insurance to health care.” The Affordable Care Act will only increase this administrative complexity. It is “far too complicated and therefore too expensive to manage, full of holes, will be applied unevenly and unfairly, be full of unintended consequences, and be easily exploited by those looking to make a quick buck.”
While the problems with the Obamacare website will eventually be fixed, the need for adequate healthcare and an assurance that the old will not starve in retirement remains as acute as ever. The Boeing Union action is another example of the increased resistance to attempts to roll back Social Security and Medicare as well as to the assault on public workers’ pensions. This battle will undoubtedly intensify as the plutocracy and its political servants seek to lower the living standard of Americans.