31 July 2013
Local Boeing workers who’ve lost their jobs will receive substantial additional federal unemployment benefits after two unions at the company sought aid under a program for employees laid off due to outsourcing and foreign trade.
Thanks to a federal program lined up by their unions, local workers laid off during the current dip in employment at Boeing Commercial Airplanes will enjoy a financial cushion that’s much, much plumper than what the average unemployed state resident gets.
“Compared to what Joe Worker gets when they get laid off, our members have a pretty extensive safety net,” said Connie Kelliher, spokeswoman for the International Association of Machinists (IAM).
The U.S. Department of Labor has approved Boeing workers — union or nonunion, production workers or engineers — laid off between April 2012 and June 2015 for a package of benefits that includes drawing unemployment pay for up to 2½ years, rather than the regular six months.
The Labor Department ruling also means that if laid-off Boeing workers need to travel, say to California, for a job interview, the government will reimburse 90 percent of the costs.
If they relocate for a new job, the government will pay 90 percent of their moving expenses and provide an additional lump-sum relocation allowance of up to $1,250.
While unemployed, they’ll also get a tax credit for nearly three-quarters of their health-care premiums. And they’re eligible for a grant of up to $25,000 toward the cost of a degree.
And for those workers over 50, if they have to take a lower-paid job after leaving Boeing, the government will provide up to $10,000 over two years in supplementary pay to make up some of the difference.
All these benefits flow because the Labor Department recently granted the IAM’s petition for federal aid under the Trade Adjustment Assistance (TAA) program, which is designed to assist U.S. workers who have lost their jobs as a result of overseas trade or outsourcing.
And after a parallel petition from the white-collar union, the Society of Professional Engineering Employees in Aerospace (SPEEA), the government broadened the approval to include all Boeing Commercial Airplanes workers, even nonunion employees.
The Department of Labor explained the decision by saying the company’s job losses here can be attributed to outsourcing because Boeing has acquired aircraft parts from foreign countries, “which contributed importantly to worker group separations.”
In addition to producing overseas airplane parts such as the wings of the 787, Boeing has outsourced engineering work to its 787 partners overseas and also employs about 1,000 engineers at its Moscow design center.
A similar petition by the IAM on behalf of its members at Boeing Wichita was turned down by the Labor Department on the grounds that Boeing is transferring the military work formerly done in Wichita to Washington state, not overseas.
After increasing its Washington workforce by about 14,000 over three years, Boeing in the first half of 2013 laid off more than 1,100 employees.
Boeing has said that by year end it will have laid off a total of about 800 Machinists and some 700 SPEEA-represented engineering and technical staff.
For them, the TAA approval is timely because recession-generated federal emergency funding that extends benefits beyond six months for all the unemployed is winding down, with the final such payments in December.
The substantial TAA benefits for the Boeing workforce are on top of extras that the unions had already negotiated with the company.
Boeing agreed to pay an extra $700 in severance pay to laid-off IAM members who had been with the company less than a year.
And per the contract, any IAM member who has been with the company more than a year gets Boeing severance pay equal to a week of pay for every year of service, up to 26 weeks, plus full medical coverage for themselves and their dependents for up to six months.
The SPEEA contract provides the same severance-pay provision and up to three months of medical coverage.
Kelliher said the union pushes for extra protection for its members, both in the contract and through federal TAA support, “because we recognize that this industry is cyclical and you need that safety net for them.”
Howard Rosen, executive director of the Trade Adjustment Assistance Coalition, which advocates for the TAA program, said Congress has reauthorized the assistance as a quid pro quo for the steady embrace of free-trade rules by a succession of presidents that have encouraged imports and outsourcing.
“This has been the trade-off for giving the president the authority to conduct trade negotiations,” said Rosen, who helped draft 2002 reforms to the TAA legislation. “In exchange for that, we should help those people who are going to be hurt.”
According to the latest annual report for the TAA program, the Labor Department approved 1,134 petitions covering an estimated 81,510 workers for the fiscal year ended September 2012.
That year, the program paid out a total $855 million in income support and $575 million more for training, employment and case-management services, job-search allowances, relocation allowances and program administration.
That’s total funding of $1.4 billion, of which Washington state got almost $41 million.
Rosen concedes that the TAA program, born out of the politics of trade liberalization, may seem unfair to workers laid off for reasons unconnected with trade.
“I would love to have a program ... that is given to all workers regardless of the cause of their dislocation,” he said. “But politically, we are not there.”
Indeed, the pressure today is to cut, not broaden, unemployment assistance. Rosen said that when TAA funding expires at the end of this year, reauthorization will be a big political challenge.
But Boeing workers are in under the wire. If the TAA is not renewed, benefits will continue for those groups already in the system, including any Boeing Commercial Airplanes employees laid off during the next two years.
Alan Tonelson, a research fellow with the U.S. Business and Industry Council, said the main complaint about the program from critics of U.S. corporate offshoring like himself is that though well-organized unions make use of the program, individuals who are not in unions often don’t realize they are eligible.
“Many workers whose jobs have been lost to foreign competition or whose jobs have been offshored, don’t know about TAA and therefore do not apply,” said Tonelson.
The IAM has held four orientation sessions in Everett and Tukwila, where eligible employees could register for benefits, and it will have four more sessions in August.
The TAA funds are not the only federal money released by Boeing’s announced layoffs.
The Workforce Development Council of Snohomish County (WDCSC), a private not-for-profit that works with the state Employment Security department, anticipates a federal grant of $2 million to provide support services specifically for laid-off Boeing workers throughout the Puget Sound area.
Dominic Gates: 206-464-2963 or firstname.lastname@example.org