Tuesday, September 23, 2008

An Ugly Old Icon

Last night Michael Flaherty of Boston City Council held a public hearing where, for the first time, the Boston Redevelopment Authority (BRA) was forced to hear public opinion. The deaf ears of Director John Palmieri and Director of planning Kairos Shen, on some level, finally heard the public. They realized the needs of the people should have been taken into consideration before planning the move of City Hall.

The BRA was tasked with studying the benefits and costs of moving Boston City Hall from it's current location to the South Boston waterfront in December 2006. Although Director Palmieri admits that he does not know how much has been spent studying the move, $800,000 has been set aside this year to study it further.

Overwhelmingly the public showed up last night, during early evening work hours and into the night, to speak against it. The BRA directors, arguing they were only in the preliminary phases of planning the move, might have realized it shouldn't be moved.

Though, Mayor Menino is the one truly responsible for the communication breakdown. Years ago the mayor unilaterally commissioned a study on moving City Hall. The tasking was executively decided without public consent or warning. Instead, the eight priorities Menino promised for his fourth term administration included: closing the achievement gap, reducing violent crime, increasing workforce housing, ensuring excellent customer service, creating new jobs, narrowing health disparities, increasing diversity in government, and growing revenue. It did not included the relocation of City Hall, while the BRA undertook the project as directed.

Councilman Flaherty was concerned during the hearing that the lack of public involvement during the BRA's initial study enabled the unwarranted and wasteful use of resources. The BRA never surveyed the constituency regarding their needs from City Hall including the importance of it's location. Then Director Shen admitted that no consideration was made in relocating City Hall to area's other than the South Boston Waterfront.

These planning errors were illuminated during the hearing, thanks to members of the Boston City Council. The authority was advised that public involvement needs to be required in the planning processes, and was reminded that ownership of the City Hall building is held by the public.

The people who showed up to this hearing took time out of their busy schedules to participate in the democratic process and deserve thanks too. This time it made a difference.

Thursday, September 11, 2008

Exports and Unions

The United Steel Workers union rejected a three year contract with Boeing and on Saturday, September 20th shut down lucrative assembly plants. Boeing reported a $4.1 billion profit last year and the people who worked to create that profit want a piece of it.

Opposition of union authority cite the drag that higher wages, pensions, and health care benefits force upon corporate competitiveness. Peter Morici, an international business professor at Robert H. Smith School of Business at the University of Maryland, says "This is a good example of why manufacturing is leaving the country". But is this true?

Boeing makes 30 percent of their plane's parts but buys the remaining 70 percent from outside suppliers around the globe, from Japan to the U.S. According to the company it was closer to 50-50 earlier this decade.

Between March 2001 and December 2007, average import airfreight prices increased just 1.7 percent; less than the cost of inflation. In certain years the cost of airfreight imports even decreased 5.1 percent. This made it extremely cheap for Boeing to import outsourced parts for their planes. Never minding the breach of quality impacts outsourcing allows, if union workers took no raises over the six year span, Boeing could still have outsourced work since supply chain costs were rock bottom.

In that time, 20,000 aircraft workers could have been added to the growing list of America's working poor. They would bog down the emergency health care system, apply for assistance, and stop spending, all while the private company recorded billions in profits. Economists should be careful when assigning "why" to causations of outsourcing. Implying workers should give up necessary benefits for the idea of saving a job is not so simple.

Today, the Bureau of Labor Statistics reported import air freight prices rose 21.5 percent over the past 12 months driven by petroleum prices. Boeing is now going to have to pay more for the parts imported from Japan, or pay workers here to make them. Note to the union: the ball is in your court.

September 27-28, 2008 (The Wall Street Journal) - Many of the defense industry's most important programs will start the new fiscal year next week with higher budgets, thanks to a quickly hashed-out bundle of bills expected to be sent to President George W. Bush for approval just before lawmakers return home to campaign ... Future Combat Systems, the Army's long term program to overhaul its fighting forces, received $26 million above the administration's $3.6 billion request, giving lead contractor Boeing Co. a boost.