Image: Boeing union members strike
Stephen Brashear  /  EPA
At the heart of the impasse between the International Association of Machinists and Aerospace Workers and Boeing’s management is the growing use of contract workers doing jobs at factories now done by full-time union employees.
By Eve Tahmincioglu
msnbc.com contributor
updated 9/10/2008 9:04:19 PM ET 2008-09-11T01:04:19

Boeing’s striking workers are on the front line of a battle for job security that’s playing out in workplaces across the country, unionized or not.

At the heart of the scrimmage between the International Association of Machinists and Aerospace Workers and Boeing’s management is the growing use of contract workers at factories doing the same jobs as full-time union employees.

“It’s a big deal here. We call it job security,” said Mark Blondin, chief negotiator for the union, in an interview with msnbc.com.

Yes, wages, health care costs and overseas outsourcing are key concerns for Boeing’s workforce and for workers in almost everything industry, from the auto to tech. But many labor advocates see the increase in contract — also known as "contingency" — workers at factories and offices in the good old USA as what could be the final nail in the labor movement’s coffin and a threat to all workers’ livelihood.

“The move to a more casual, more contracting, freelance-type labor force brings freedom and flexibility for workers and companies but at the expense of a safety net and job guarantees. It’s the watering down of job security,” says Dan Cornfield, a labor expert and professor of sociology at Vanderbilt University. “This is the new battleground for the American Dream.”

Indeed, the contingency workforce — including independent contractors, part timers and temporary workers — tend to be paid less, have little or no health insurance or retirement plans, and few if any protections under existing labor laws.

There are about 42 million contingent workers, or about 30 percent of the overall workforce, in the U.S., according to the most recent figures provided by the Government Accountability Office.

This type of contingent labor pool is nothing new when you look back in labor history.

“The model of employment that’s emerging,” explains Cornfield, “is similar to what we had in the early 20th century. We are returning to a pre-New Deal kind of period.”

The use of contract workers gives the employer a great advantage over the workers, says Rep. Lynn Woolsey, D-Calif. “We need to turn that around where workers actually receive their share of benefits for the amount of benefit they bring to a company.”

For businesses struggling to stay afloat in a faltering economy, the use of such workers makes sense.

Companies generally are willing to pay higher wages and benefits if they know they have the flexibility to hire contingent workers when needed, says Howard Bernstein, an attorney for Neal, Gerber & Eisenberg, who represents employers during union negotiations. “It doesn’t have anything to do with favoring one or the other. They’ve got to have the flexibility when it comes time to bid a job to make good business decisions for the cost and quality of work.”

In the case of Boeing, union leaders have asked for the right to bid against those outside contractors but management has refused to consider the options, according to the Machinist union’s Blondin.

The fear is, he adds, is that union jobs will be lost permanently as more and more contractors pick up work that formerly was handled by union members. Jobs being contracted out at Boeing include maintenance, construction, and delivery and disbursement of inventory on the factory floor.

“Boeing wants to circumvent its unionized workforce, and that doesn’t sit well with our members,” Blondin says. “They don’t like what they’re seeing down the road.”

Boeing management maintains that they need the flexibility to hire whomever they believe would provide the company with the most efficiency.

“The issue is flexibility — the flexibility we need to be able to be productive and efficient, to be successful,” says Tim Healy, a Boeing spokesman.

Some argue that the use of contingency workers actually bolsters job security and gives some workers more choices.

Dianne Durkin, president of corporate consulting firm The Loyalty Factor, says the growth in contracting is not only company-driven. “A lot of people don’t want to work full-time jobs anymore,” she says, pointing to the desire among many baby boomers to scale back their careers.

Tom Mobley, a human resource professor at the Farmer School of Business at Miami University, says for those who want the traditional 9-to-5 job with benefits, “this contingency workforce is protecting you. If everyone were on the payroll, then we’d have to layoff everyone when times are tough.”

What’s interesting in the Boeing situation, he says, is that the company is doing well financially and can’t fill airplane orders fast enough.

Boeing actually has been burned previously, he says, when it subcontracted out work to other countries and ended up with quality issues and major production delays. Problems with the much-delayed 787 Dreamliner program have been blamed in part on managing a global supply network that has included possibly more outsourcing than on any previous model.

Mobley surmises Boeing is pushing the in-house contractor issue while it is flush because it wants to keep its options open when times get tough in the future.

“Once labor gets something, they don’t want to give it up,” Mobley says.

The same could be said of Boeing management.

After 9/11, when Boeing was hurt by the sharp downturn in the airline industry, the company won contract modifications that opened the door to more outsourcing. Now that Boeing's has rebounded the company is extremely reluctant to give up those rights.

“It doesn't make sense to change the rules that have allowed us to be successful,” says Boeing’s Healy.

Healy says the company's use of contractors is not meant to replace union jobs.

“Boeing has a history of pretty dramatic swings in hiring people and laying off people, so one of the things that outsourcing does is allows us to retain the core most experienced, most skilled people we need and make sure their jobs are going to continue," he says.

The union isn’t buying it. Blondin points out that in 2002 about 62 percent of union members voted to reject the contract offered by Boeing, but that fell short of the 68 percent needed to authorize a strike. So the contract eventually was approved.

But this time around, 80 percent of union members backed their union leaders and rejected Boeing's contract offer.

What the union now wants, Blondin says, is a chance to build a case to Boeing that its members can do the same work as contractors but more efficiently.

“Give us a voice to say we can be that much more successful,” says Blondin. He says the union's members are prepared for a long strike if necessary: "We’ve stayed out two to three months in the past.”

Regardless of how the Boeing strike turns out, labor advocates acknowledge that the trend to use contingent workers is well-entrenched and unlikely to be reversed anytime soon.

It’s a fight between the flexibility that comes with a contingency workforce, and the security that comes with a full-time job with benefits and good pay, according to Vanderbilt’s Cornfield.

The outcome, he says, will depend in part on how successful unions will be in organizing the nation’s workers beyond the manufacturing sector.

“As long as it’s Boeing workers fighting alone, there will be a tough road to go,” he says.

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