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Stitch
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Seattle Times - WA Aerospace Jobs Up, Pay Down

Sun Dec 16, 2007 4:05 pm

The Seattle Times this morning ran a front-page article on pay in the WA aerospace industry. You can find the article online here: http://seattletimes.nwsource.com/htm...erospace/2004076057_787jobs16.html

In a nutshell, they found that while the 2003 tax breaks have indeed brought significant new aerospace jobs to WA state, most of those jobs pay less then $20 an hour (upwards of half in some cases) while most jobs at Boeing pay more then $20 an hour, thanks to the IAM and SPEA unions. In fact, most WA aerospace workers make less money then the average WA worker, however that data needs to be adjusted against the significant high-tech industry in the state. If we were still mostly logging, like fifty years ago, I expect aerospace would be paying mighty well. Also, a significant number of these new workers are either immigrants or young people fresh out of high school who do not have an educational background in the industry and are mostly learning "on the job" as they watch more experienced co-workers.

On the plus side for the state, these jobs would be outsourced, anyway, so at least WA is making revenue from them and not AL or SC - or Mexico or China. So in the eyes of the state government, the tax breaks have done their job - keeping an active aerospace sector in the state, even if the low wages now makes non-Boeing aerospace jobs more of a temporary position instead of an entry-level position to a long career in the industry.
 
Rheinbote
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RE: Seattle Times - WA Aerospace Jobs Up, Pay Down

Sun Dec 16, 2007 6:14 pm



Quoting Stitch (Thread starter):
a significant number of these new workers are either immigrants or young people fresh out of high school who do not have an educational background in the industry and are mostly learning "on the job" as they watch more experienced co-workers.

What if at some point in time there are no more experienced workers to watch and learn from?

The report is on C&D Aerospace. In addition to 787 fuselage frames, C&D, previously known as Northwest Composites, makes the interiors for Boeing's 767.

Reading this article I think I am beginning to loose faith in the Boeing business model. Not so much because I see safety at risk - these trained-on-the-job people are probably doing a great job and deserve respect for doing so at a measly $10-15 an hour.

I am more concerned about the long-term implications. I am concerned that investors' unbridled greed for short-term profits may be going to destroy the skill- and knowledge-base of the aerospace industry in the long run. If companies decide that an investment into a skilled and knowledgeable workforce is no longer justified, bright young people might no longer be willing to invest their time and resources into proper educating themselves for a job in such an industry.

Is it a mere coincidence that the 787 is suffering not only from a shortage in fastneres, but from a shortage in fuselage frames as well, C&D reportedly being the culprit? Is it a mere coincidence that Vought has run into trouble with its trained-on-the-job low-wage newbie workforce?  scratchchin 

You can't have sophisticated, high-tech, quality products for free.  no 
 
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Stitch
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RE: Seattle Times - WA Aerospace Jobs Up, Pay Down

Sun Dec 16, 2007 6:47 pm

Price drives the airline industry. It always has, but it really does so now. Boeing's business model needed to address that. Yet, in the end, Boeing needs suppliers who can meet their needs. If nobody wants to work for a Boeing supplier in the United States because the wages are too low, then Boeing either has to find suppliers in other countries who will (as Airbus is doing in the US, Russia and China) or they need to start paying more to those suppliers in the US to attract and retain trained staff. The Governor hopes that Boeing suppliers will raise their wages and benefits to keep those people.

The Seattle Times ran a series of articles last year (I believe) about the Chinese aerospace industry. They noted that as Boeing and Airbus increased their presence there, it drove demand for skilled workers. Chinese aerospace workers were very mobile, moving from company to company as they were offered better deals. As such, Chinese aerospace companies had to increases wages and benefits both to poach workers from competitors as well as to keep their own workers from being poached.
 
threeifbyair
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RE: Seattle Times - WA Aerospace Jobs Up, Pay Down

Sun Dec 16, 2007 11:42 pm



Quoting Stitch (Thread starter):
In a nutshell, they found that while the 2003 tax breaks have indeed brought significant new aerospace jobs to WA state, most of those jobs pay less then $20 an hour (upwards of half in some cases) while most jobs at Boeing pay more then $20 an hour, thanks to the IAM and SPEA unions. In fact, most WA aerospace workers make less money then the average WA worker, however that data needs to be adjusted against the significant high-tech industry in the state.

Still, you can make $15/hr or more working at Safeway, Costco, etc. Same goes for truck and bus drivers, warehouses, railroads, and other blue-collar jobs. I don't see the economic benefit of using state revenues to pay off these companies just because their product happens to be aerospace-related, when there are literally hundreds of other employers who pay similar wages and benefits and employ many times more workers.

Basically, Washington is using the tax revenues from high-tech workers (among many others) to subsidize companies to provide low-paying jobs that a strong economy would provide anyways (in some other industry). Doesn't make much sense, or $$$$, to me. Instead, the state should have reformed the terrible B&O tax (which calculates tax based on gross revenue, not net profit) to make Washington more competitive in ALL industries.

The aerospace industry is simply starting to behave more like other manufacturing industries by using outsourcing to cut costs. Governments can try to fight the changes, but in the end, tax incentives can't compensate for the substantially lower wages in other countries.
 
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Stitch
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RE: Seattle Times - WA Aerospace Jobs Up, Pay Down

Mon Dec 17, 2007 2:17 pm

Part II - http://seattletimes.nwsource.com/htm...erospace/2004077616_787jobs17.html

Huge tax breaks for aerospace didn't deliver many new jobs

Quote:
The bad news? Washington didn't get many new jobs from granting Boeing a huge tax break.

The good news? It may not be quite so big a tax break as we all thought.

The controversy over that tax-incentive package, passed in 2003 to ensure that Boeing's 787 Dreamliner was assembled here, will soon be rekindled.

Next year state lawmakers will debate expansion of the aerospace tax incentives to more companies. And within a couple of years they'll face pressure to ensure that Boeing's next jet after the Dreamliner is also built here.

It looks like Washington State will take a tax revenue hit $500 to $900 million less then the original $3.2 billion calculated over 20 years. On the flip side, it looks like only 200 of the expected 3,600 new jobs those tax cuts were expected to generate have happened.

Quote:
"We have failed miserably at attracting new engineering companies," said John Monroe, a former Boeing executive who now consults for the state and Snohomish County on aerospace economic development. "We missed out on the big stuff."

Boeing themselves have added 14,000 jobs since July 2005, but that is driven more by demand for the 737-777 programs and is still only about a quarter of the jobs shed in 2001 and 2002.

[Edited 2007-12-17 06:24:19]
 
roseflyer
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RE: Seattle Times - WA Aerospace Jobs Up, Pay Down

Mon Dec 17, 2007 6:03 pm

That's a disturbing article. It pretty much sums up why companies like Boeing outsource.

However I don't think it is as bad of a case as the article makes it sound. This type of work was going to be outsourced regardless. Washington offered incentives to keep the work in the state. Yes people are earning under $20, but they don't have college degrees, so that isn't uncommon. The difference is that IAM and the machinists at Boeing get paid a lot. That pay has always been high.

Quoting Stitch (Thread starter):
In a nutshell, they found that while the 2003 tax breaks have indeed brought significant new aerospace jobs to WA state, most of those jobs pay less then $20 an hour (upwards of half in some cases) while most jobs at Boeing pay more then $20 an hour, thanks to the IAM and SPEA unions.

The article made a big deal about engineering jobs at other companies paying horribly. SPEEA is the engineering union, and no one in that union earns under $20 an hour, but that's the standard among large companies in the United States that do a lot of engineering work. Whether you work at a bottle company, beer company, or in aerospace, engineers with a degree have starting salaries above $50,000. That's no different at Boeing. Boeing doesn't pay a lot more than comparable companies.

Quoting Rheinbote (Reply 1):
I am more concerned about the long-term implications. I am concerned that investors' unbridled greed for short-term profits may be going to destroy the skill- and knowledge-base of the aerospace industry in the long run. If companies decide that an investment into a skilled and knowledgeable workforce is no longer justified, bright young people might no longer be willing to invest their time and resources into proper educating themselves for a job in such an industry.

It's nothing new to have people do engineering work without degrees. That's been true for years, even at Boeing. But there are still new engineers coming into the company. There are tons of new engineers being hired as older pepole retire in the aerospace industry.
If you have never designed an airplane part before, let the real designers do the work!
 
tdscanuck
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Joined: Wed Jan 11, 2006 7:25 am

RE: Seattle Times - WA Aerospace Jobs Up, Pay Down

Tue Dec 18, 2007 4:59 am



Quoting ThreeIfByAir (Reply 3):
Still, you can make $15/hr or more working at Safeway, Costco, etc. Same goes for truck and bus drivers, warehouses, railroads, and other blue-collar jobs. I don't see the economic benefit of using state revenues to pay off these companies just because their product happens to be aerospace-related, when there are literally hundreds of other employers who pay similar wages and benefits and employ many times more workers.

Safeway, Costco, and most of the other companies like that employ only a fraction of the people that Boeing does in Washington, and the economic impact of their business on other companies in the area is even less pronounced. The overall benefit of having a company like Boeing around goes far beyond the wages they pay out directly to the lower-wage earners.

Tom.

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