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Boeing strike likely to impact South End economy
As the strike by 27,000 machinists at Boeing moved into a second week, experts say it is going to take a bite out of the South End economy.
“It’s going to affect the local spending significantly,” said Sharon Hart, executive director of the Island County Economic Development Council.
More than 350 Boeing employees live on South Whidbey and a thousand or so live in Island County.
Estimates of how long the impasse in talks will last between the International Association of Machinists and Aerospace Workers District Lodge 751 and Boeing management range from about three weeks, which would mark the time when health insurance coverage lapses for the strikers, to shortly before Thanksgiving.
Boeing’s machinists union is seeking a wage raise of about 13 percent.
Machinists earn an average base pay of $54,000 a year under the current contract.
At the end of the three-year contract, the average base pay would increase to $65,000, and with overtime, the figure would be $77,000, according to Boeing.
Over the three years, Boeing estimates that an average machinist would receive $34,000 more in total pay.
Union leaders also take issue with proposals to eliminate medical benefits for some retirees, and the idea to kill off a traditional pension program for new hires while giving them a 401(k)-like retirement plan instead.
Hart said every dollar Boeing employees spend in the community is circulated three times.
“We capture probably 85 percent of it, mostly in housing,” she said.
The longer the strike lingers, the less money can be spent in the community, even though Boeing employees are known to prepare financially for strikes, she said.
The strike began Sept. 6 after talks with a federal mediator failed. The union’s last strike, in 2005, lasted 28 days.
Hart explained that manufacturing strikes are tough on the economy because people in the sector generally make higher wages, an average of
$26 an hour compared to about $8 in the service sector. And on Whidbey Island, there aren’t many jobs for people to fall back on.
“We don’t have a lot of manufacturing to backfill,” she said.
Some 26,000 of the affected workers are in the Puget Sound region, with an additional 1,500 in Portland and roughly 800 at the defense aircraft modification plant in Wichita, Kan.
“It’s the state’s largest private employer. It’s really concerning,” Hart said.
Adding to the financial stress is that many local organizations that help people in financially tough times, such as Good Cheer, the Opportunity Council, Friends of Friends or Helping Hand are facing higher-than-usual demand due to the economic downturn.
“I’m hoping it gets settled very soon,” Hart said of the strike. “Nobody is walking around with any extra pocket change.”