A New Grand Bargain?

Steven Greenhouse has a thought-provoking piece in the Times detailing how and why Boeing came to a labor agreement with its workers and wondering whether this is not the beginning a new “Grand Bargain.” The original Grand Bargain was the deal postwar workers made with companies (specifically General Motors workers but it grew far beyond that single contract) that provided for high wages in exchange for labor peace, creating the middle class of the second half of the twentieth century. I would argue that the Grand Bargain ultimately cost workers in the end because it lulled workers and unions into complacency, making them completely unable to adjust and regain militancy when corporations began moving jobs abroad in the 1960s. But there’s no question that the Grand Bargain also created 2 generations of rising prosperity.

So is Boeing setting a trend that could lead to a return of middle-class industrial jobs? Labor historian Nelson Lichtenstein disagrees and, unfortunately, so do I.

Professor Lichtenstein, a labor historian at the University of California, Santa Barbara, sees the Boeing deal as far different from the G.M. deal in one important respect. He does not believe other companies are going to rush to copy the Boeing deal. Indeed, Boeing signed its generous contract in an era when many companies are reluctant to deal with labor unions, and those that do often seem to be demanding concessions.

Professor Lichtenstein said, “This kind of successful private-sector bargaining is so unusual today — and the Boeing situation is so different from the rest of the economy — that it will set no ‘pattern.’”

Indeed, Boeing occupies a unique place in American life because of its monopoly, the fact that it still largely employs Americans, and its centrality in the defense industry. There are few monopolies that have not outsourced the majority of work. Combining that with Boeing’s very public government contracts and it is very difficult for them to go global from a public relations standpoint. Is Boeing really going to use Chinese labor to make American military aircraft? That would be very difficult for many reasons.

Of course, Boeing’s contract creates thousands of middle-class jobs and helps undermine its attempt to maximize profits by moving its unionized jobs in Washington to non-union positions in South Carolina. Those well-paying jobs will benefit the entire economy, as would similar jobs if corporations returned production to the United States. But we all know that’s not going to happen.