Boeing, union in battle of numbers

Boeing Co. and the International Association of Machinists union are touting wage numbers to sway North Charleston workers

Union-eligible workers at Boeing Co.’s campus in North Charleston make, on average, more than $10 less per hour than their counterparts at Boeing’s other Dreamliner campus in Everett, Wash., but an economist, union leaders and company officials say raw wage numbers don’t tell the whole story.

Workers also need to consider how much it costs to live along the South Carolina coast versus the Seattle metro area to determine whether they are paid fairly.

“I think the only way to effectively evaluate the pay scale between Washington and South Carolina is to look at cost of living differences,” said Joey Von Nessen, a research economist at the University of South Carolina. “It’s significant.”

Tenure also plays a role. The more years of service a worker has, the more money he or she will make.

Union officials say their effort to gain a foothold in Boeing’s North Charleston facilities isn’t all about pay. It’s also about issues such as mandatory overtime and how managers treat front-line workers on the production floor.

The International Association of Machinists union will give workers “a voice in all of the decision-making,” said union spokesman Frank Larkin.

Production and maintenance workers — 3,175 of them — at Boeing’s three North Charleston production facilities will vote April 22 on whether they want the IAM to represent them. The vote will be the largest organized labor push in South Carolina — a state where just 2.2 percent of workers belong to unions — in decades.

As in most labor organizing campaigns, wages are a key issue.

Beverly Wyse, vice president and general manager of Boeing South Carolina, released figures last week that show the plant’s production and maintenance workers make an average of $20.59 per hour, or $42,827 a year for a 40-hour work week. A scheduled 1.9 percent pay increase this fall would boost the average wage to $20.99 per hour, or $43,659 a year.

With that scheduled increase, average wages for Boeing South Carolina’s union-eligible workers will have increased 18.9 percent over the past three years, according to company figures.

The company said benefits such as paid sick time, incentive pay and health and disability insurance boosts the average total compensation to $80,000 per worker.

“When you compare that, either on average or with the aerospace industry in this area, it’s an impressive package and it’s consistent with the Boeing strategy,” Wyse said. “We not only make sure that we’re paying excellent wages, but we really also focus heavily on the benefits that we offer.”

Boeing South Carolina’s current average wage is in line with the Charleston region’s average of $20.62 per hour, according to the U.S. Bureau of Labor Statistics. It’s higher than the area’s average for production workers, which is $19.33 per hour, according to bureau figures.

Boeing’s workers in Washington state make an average of $31.28 an hour, or more than $65,000 a year, according to IAM spokeswoman Connie Kelliher. A scheduled 2 percent pay raise this fall will bring those totals to $31.90 per hour and $66,352 per year.

“In addition, we get quarterly cost-of-living adjustments that permanently become a part of their base rate every September, as well as our general wage increases,” Kelliher said.

Boeing South Carolina spokeswoman Candy Eslinger said the Washington state numbers are skewed because workers there have much more time on the job.

“You have to look at the difference in the number of years of service between the two,” said Eslinger, who adds the longest-tenured employee in North Charleston has six years of service with Boeing and most workers have less. “A person with four years of experience in Everett is not going to make that” facility’s average wage.

The average tenure of Boeing’s Washington workers is just more than 13 years, Kelliher said.

“However, the six year mark is where people move to the maximum pay,” she said. “After that time, seniority really doesn’t do anything to pay because they are at the maximum already. Seniority comes into play for vacation, promotions, layoffs, etc.”

Larkin said pay at both Boeing sites “starts out relatively close” but that workers with more years of service in Everett make “considerably more.”

Boeing officials point out the cost of living is lower in the Charleston region than in Everett, which means a lower wage still can have comparable buying power.

But just how much more cash it takes to live in Everett depends on who you ask.

The American Chamber of Commerce Research Association says the average price for housing, consumer goods and services is nearly 30 percent higher in the Seattle metro area, which includes Everett, than locally.

Housing represents the biggest price difference, the association says, with average apartment rents topping $1,900 a month near Boeing’s West Coast plants compared to $1,100 locally. Some items, such as clothing and groceries, cost more in the Charleston region.

A different calculator by the Council for Community and Economic Research shows a much smaller cost of living margin. The council says it costs about 6.6 percent more to live in Everett than in North Charleston, with most of that difference eaten up by housing and utilities.

Bryan Corliss, an IAM spokesman who has researched the cost of living in both areas, said most figures show a 10 percent to 15 percent jump in prices in Everett compared to North Charleston.

Corliss said online calculators that factor in the metro area’s wealthiest ZIP codes — “such as the neighborhood where Bill Gates lives” — instead of direct city-to-city comparisons make the cost of living appear much higher than the reality for Everett workers.

“The national right-to-work campaign tries to dismiss the union advantage in pay by saying, ‘Well, companies in blue states just pay more because it’s more expensive to live there,’ ” the IAM’s Kelliher said. “But a 10 percent to 15 percent difference in living costs doesn’t come close to explaining the fact that our average wage in August 2014 was 49 percent greater than the current average wage in North Charleston.”

Eslinger said most of Boeing South Carolina’s production and maintenance workers live in Berkeley and Dorchester counties, which typically have lower costs than Charleston County.

Larkin said Boeing workers in North Charleston currently have no guarantee that their wages will increase or even stay the same as they are now.

“The terms and conditions provided by the company in the midst of an ongoing union campaign may only last as long as the organizing campaign,” he said. “The only way to ensure what wages will be is with a contract.”

A contract also can resolve other issues, such as overtime.

“We’ve heard loudly from the employees that the amount of overtime they were working last year was too much,” Wyse told The Post and Courier. Wyse said teams of employees have been formed to make recommendations on how overtime should be handled going forward.

“And we’ve put in some hard and fast limits on the amount of overtime and the advance notification that we’re going to” give workers who have to put in extra hours, she said.

“It’s that flexibility to listen to the team and say, ‘Hey, let’s shape it,’ that from my perspective you lose — the ability to be nimble and to really get that one-on-one conversation with the teammates — in that union environment,” Wyse said.

However, Larkin of the IAM said promises made regarding overtime — or any workplace issue — can change on a whim without a written contract. Jon Holden president of the IAM’s District 721, which represents Boeing workers in Washington state, addressed the issue in a recent newsletter.

“Our union contract ensures that when we have to work overtime, there are rules so it is assigned fairly,” Holden said. “The contract also limits the total amount of designated overtime the company can require, and defines that either time and a half or double time is paid when we must work overtime.”

Eslinger said the IAM negotiations at Boeing’s Washington state plants aren’t typical of the contracts the union has negotiated recently at other company locations. In Huntsville, Ala., for example, new hires have received average annual raises of 3 percent over the past three years. Unionized Boeing workers in St. Louis have received 1 percent annual wage increases over the past three years. The average at Boeing South Carolina has been 6 percent.

Although union membership has declined nationally, studies show union members typically have better pay and benefits.

The Bureau of Labor Statistics reported in January that the nation’s union members, on average, made about 27 percent more in weekly wages than their non-union counterparts. Federal data also show union workers with families contribute an average of 15 percent less for health insurance costs than non-union workers.

“Thanks to our ability to bargain collectively, we ... have been able to improve our wages, hours and working conditions at Boeing and other employers where we represent the workforce. In the process, we have raised the standard of living in the communities in which we live,” Holden said. “I feel strongly that the workers in Charleston will also benefit themselves, their families and their communities, once they have the right to bargain collectively with their employer.”

Wyse said she believes the wages at Boeing’s North Charleston campus are at the right place — competitive but not too high.

“Ensuring that we have competitive wages is critical,” she said. “Nobody should want to be working in an area where your wages are being paid well above the market or are noncompetitive. Everybody’s favorite example of that is Detroit. And so I think it’s relevant to look in the local area. For building airplanes, we have to be able to attract the best and we have to demonstrate that we’re going to invest in their growth.”

The IAM last month presented its petition for a union vote to the NLRB, getting what union officials called a “significant number” of Boeing workers to sign authorization cards expressing interest in union representation. The IAM had to get at least 30 percent of eligible workers to sign cards.

Those eligible to vote include all full-time and regular parttime production and maintenance workers at Boeing’s Dreamliner manufacturing site next to Charleston International Airport, as well as those at the company’s Interiors Responsibility Center and the newly opened Propulsion South Carolina plant, both at Palmetto Commerce Park.

The question on the April 22 ballot will call for a simple “yes” or “no” answer as to whether the voter wants to be represented. The results will be tabulated immediately following the conclusion of the last voting session, which is scheduled to end at 5 p.m. Challenges to the voting process could be filed afterward.

The IAM is the nation’s largest aerospace union, representing more than 35,000 Boeing workers at 24 locations nationwide, including at the company’s Washington state facilities. The union also represents approximately 90,000 workers at Lockheed Martin, General Electric, United Technologies and other companies.

Reach David Wren at 937-5550 or on Twitter at @David_Wren_