As news swirls around about whether the Boeing Company is moving some of its 787 operations to South Carolina, there’s been a lot of comparing and contrasting of our two regions. And, of course, one area where they “beat” us is in labor costs.
That comparison has caused a lot of people to call publicly for the union to do something about that, possibly even renegotiating the existing contract to either reduce costs or at least ensure more stability.
But the response that I haven’t seen enough of is what labor costs get you. There’s a difference between “highly paid” and “overpaid,” right? In fact, one of the reasons that workers in other places aren’t as highly compensated is that they have less training, less education, less experience and less expertise. We’re pretty happy to have a highly effective aerospace workforce in this region, and so – mixed with the overall higher standard of living here – it’s not surprising that they make more. And as we all know, the reason that Boeing had to buy that South Carolina plant full of lower paid workers in the first place is that they were the source of a huge amount of problems.
The problem then, in part, is the metric. Instead of comparing labor costs as if it’s apples to apples, we need a measure of “productivity/wage ratio.” Essentially bang for the buck…or “plane for the penny” as the case may be (or “dreamliner per dollar”?). Probably hard to measure exactly, but you could use a few stand-ins. The more we change the discussion on that point, the more competitive this region appears.