Will the NLRB Boeing Complaint Actually Hurt Unions and Union Shop States?

By Steve Arthur, Vice President

Last month’s National Labor Relations Board (NLRB) complaint against Boeing for building a plant in South Carolina was clearly intended to protect union jobs. According to its own press release, the NLRB filed this complaint because Boeing decided “to transfer a second production line to a non-union facility.”

However, while the NLRB’s goal may be to protect union jobs, it could very well end up having the opposite effect. While it may benefit the Boeing union workers in Washington State, it is likely to hasten the movement of jobs from union shop to right-to-work states, hurting unions overall. Why would any company right now even consider locating any new facility in a union shop state if the federal government might preclude them from relocating in the future if union demands become excessive? It would be safer to avoid union shop states all together and only build or expand in right-to-work states. Even those companies who are not currently unionized in union shop states should be concerned because at least one of President Obama’s appointments to the NLRB, Craig Becker, believes that the NLRB can impose Card Check without congressional approval.

The Wall Street Journal and other media outlets have pointed out that if the NLRB complaint is upheld, it will have a significant impact on right-to-work states’ ability to attract businesses from union shop states, and likely drive business out of the country rather than from one state to another. This is no doubt true for large companies whose plants are already unionized in those states. It may not be true for smaller and non-unionized businesses, who are likely to prosper below the union radar screen, and more easily able to move from state to state without challenge.

Unions do have reason to be concerned about jobs shifting to right-to-work states. According to Stephen Moore and Arthur Laffer, authors of an annual report called “Rich States, Poor States” for the American Legislative Exchange Council, between 2000 and 2009 right-to-work states grew faster by almost every measure. As jobs move to those states, dues disappear from the union coffers. In a recent editorial (http://on.wsj.com/mkNnLR) they cite several statistics to bolster their claim: Right-to-work states’ gross state product grew by 54.6% compared to 41.1% for the union shop states, personal income grew by 53.3% compared to 40.6% and payrolls increased by 4.1% compared to a loss of 0.6% in union shop states. Finally, population growth in the right-to-work states was almost 12% compared to just over 6% for union shop states. These are the numbers that have unions scared and prompted the NLRB filing.

For companies, however, these are enticing numbers. Not only do right-to-work states offer better protection from abusive union tactics; since they are growing faster, they provide expanding local business opportunities. Small and non-union companies can make the move to right-to-work states without NLRB involvement. If companies do that, the NLRB decision will indeed create an overall negative effect on unions and union shop states.

Beyond that, however, this complaint sets a terrible precedent for the ability of government to involve itself in an even wider array of business decisions. From the Boeing complaint, is it really that far of a leap for the government to use other coercive means to protect certain jobs?

Could the federal government look at tax rates used to pay teacher and police salaries and prohibit companies from moving to low tax states because the move could put education or public safety at risk? What about environmental laws? Is it a stretch to believe that the federal government could require an environmental impact statement comparing total environmental impacts in both states based on all the environmental laws of those states? I don’t even want to suggest any other ideas facetiously, because I am afraid they might be taken seriously by some; although the NLRB complaint has probably started the brainstorming in some federal agencies and union halls already.

Now it is your turn. What do readers of this blog think could be the next potential target to advance union or other political goals in attempting to restrict businesses from making sound business decisions? Do you agree that this could actually hasten business relocations to right-to-work states?

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