Unintended Consequences


Should the NLRB prevail in its attempt to tell Boeing where it can and cannot build new plants and direct new work, it will, in the end, only make things worse for places like Washington State, not only for South Carolina.

Obviously, South Carolina would suffer, and while my sympathies for them are somewhat limited at the moment, owing to the results of this evening’s College World Series game, the fact is their workers haven’t done anything wrong by agreeing to work for a lower wage as opposed to staying unemployed.  Success by the NLRB will rob them of livelihoods, and likely force Boeing to swallow the loss and move the work overseas, to the extent possible.

Washington State would suffer, though, as well.  The delays – possibly years of them – caused by this frivolous lawsuit, will give their competitors time to catch up and carve away pieces of market share, long-run sales which are extremely difficult to get back.  This is especially true in a capital-intensive industry with a long product development cycle.  The profits from the 787 sales would not only recoup Boeing’s investment in the plane, but fund development of their next generation of jets as well.  The workers in Washington, counting on the work that would have gone to South Carolina, will find that work diminished, as well as the work in their existing shops.

Worse, while businesses that are already mired doing work in heavily-unionized states might have to shift work overseas, or fold altogether (the option of opening new plants in affordable states having been foreclosed), who in their right minds would start doing business in Washington if they didn’t have to?

Of course, this all falls under the rubric of Bastiat’s Seen and Unseen.  What’s seen is the few jobs that will trudge, unhappily, back to Seattle.  What’s unseen as all the jobs that will never materialize there in the first place.

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