WASHINGTON -- A controversial complaint recently filed by the National Labor Relations Board (NLRB) against the Boeing Company became the centerpiece of a passionate debate on Capitol Hill Thursday over the decline of labor unions in the U.S., the erosion of the American middle class, and the best approach to building jobs in a slow economic recovery.
The hearing before the Senate Committee on Health, Education, Labor and Pensions sought to examine why the middle class is shrinking, but much of that discussion ended up focused on the complaint against Boeing, whose vice president and general counsel, J. Michael Luttig, appeared before the committee as a guest of Republicans. In his testimony, Luttig wasted little time before blasting the NLRB, calling the complaint "preposterous on its face" and "a breathtaking substitution of the [labor] board for management in the running of an American company."
In the complaint filed last month, the labor board's acting general counsel said Boeing broke the law when it made plans to create a new production line for its 787 Dreamliner in South Carolina, rather than in Washington state, where it had an existing workforce of unionized employees. The complaint alleged that Boeing's move was retaliation against its Washington employees affiliated with the International Association of Machinists and Aerospace Workers, who had gone on strike in the past. A wide and growing group of Republicans have used the Boeing issue to paint the NLRB as pro-union and the Obama administration and Democrats as anti-business.
Although he accused Republicans of overly politicizing the Boeing complaint, committee chairman Sen. Tom Harkin (D-Iowa) said that dwindling union membership and the decline of collective bargaining had a lot to do with the financial squeeze America's middle class has felt in recent decades.
Harkin even used Boeing as an example of the growing wealth disparity between workers and their management when questioning Luttig (video of the exchange is below). He noted that the average Boeing worker in Washington earned $26 an hour and in South Carolina $18 an hour, while Luttig enjoyed a pay package of $3.7 million in 2009, a 34 percent increase over the previous year's.
"Why shouldn’t employees at Boeing get a 34 percent increase?" Harkin asked Luttig. "What's going on here? ... I'm just asking about fairness for workers."
Addressing the tough inquiry regarding his own salary, Luttig joked, "At this very instance I have the sense that maybe it's not enough," prompting a mixture of laughter and gasps. He went on, "Jobs and job growth is what we need to come out of this. Of course I share the committee's concerns about the middle class. If we could pay [our workers] more, we would, and when we can, we will.
Rallying to Boeing's defense, ranking committee member Sen. Michael Enzi (R-Wy.) said, "This company deserves our congratulations and respect, not our demonization." Sen. Mark Kirk (Ill.) went much further, saying that the NLRB had decided to "torture" Boeing through legal fees related to the complaint.
Overall, the hearing seemed to indicate that Democrats are far less eager to make a larger political issue out of the Boeing complaint than Republicans are. Much like the NLRB, which has downplayed the scope and significance of the complaint, Democrats have tried to define it as a procedural matter being blown out of proportion.
Republicans, on the other hand, have declared it an attack on corporations and "right-to-work" states like South Carolina, which prohibit agreements between unions and companies that make union membership a condition of employment. While labor groups have hailed the NLRB's move as a victory for workers, earlier this week a group of Republican lawmakers and business interests assembled at the U.S. Chamber of Commerce to declare it a dangerous precedent that would move jobs overseas.
"Employers across the country have been greatly disturbed" by the complaint, Enzi said, adding that it "sounds like China, not the United States ... It will create a chilling effect nationwide."
But Sarah Fox, legal counsel at the AFL-CIO and a former member of the NLRB, said before the committee that the Boeing complaint was made on solid legal footing. "There's really nothing extraordinary about this complaint," she testified. "What is exceptional about this case is not the novelty of the legal theory, but the size and power of the company that has been charged, and the magnitude of the decision that is at issue." The NLRB, she added, shouldn't make its enforcement decisions based on whether they will be "politically unpopular."
Although he wasn't specifically addressing Boeing's expansion with a non-union assembly line in South Carolina, former Labor Secretary Robert Reich testified that the shrinking number of union members in the American workforce has coincided with the slowing growth of wages in recent years. "The lines are diverging," Reich said of worker wages relative to executive pay. "People know this. They feel like the game is stacked against them."
Watch the exchange between Harkin and Luttig: