Boeing’s Hollow Victory

As first publish by the Los Angeles Times on January 7, 2014.

By Hedrick Smith

The narrowly approved contract agreement between Boeing and its Washington state workforce will be hailed by some as a victory for the canny, hardball brinkmanship of Boeing’s management and the knuckle-under economic pragmatism of the International Machinists Union.

But the steep cutbacks in retirement and health benefits that tens of thousands of Boeing workers were forced to swallow have far larger implications for middle-class America.

Boeing’s stingy treatment of its highly skilled workforce offers a vivid example of how America’s new economy has created gaping economic inequalities and steadily squeezed the economic life out of the U.S. middle class over the last three decades, even as corporate profits and CEO pay have skyrocketed.

Boeing’s case epitomizes that sharp economic divide. For just as the company was wringing concessions from its workers, its board of directors approved a 50% increase in the company’s stock dividend and a $10-billion stock buyback that will richly reward investors and executives who get paid in Boeing shares.

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