Boeing Deal’s Big Compensation Bump Raises Bar for Other Unions

A Boeing Co. worker union made some of the most impressive gains on a collective bargaining agreement this year in a recently ratified a contract that took rejecting several management proposals—signaling broader momentum for organized labor.

The International Association of Machinists and Aerospace Workers District 751 reached a deal with the airplane maker late Monday that secured a 38% wage hike and $12,000 signing bonus, beefed up retirement benefits, and committed to building planes in Seattle. The Boeing contract’s annual average compensation increase— 13.25% per year—is the largest of any manufacturing-sector union contract ratified in 2024, according to an analysis of Bloomberg Law data.

The contract was signed after the union’s rank-and-file voted against a previous tentative agreement reached by their leadership that they said didn’t go far enough. That push from workers for the best possible deal highlights pent-up frustration over stagnant wages and growing awareness about how much leverage they held to improve working conditions, observers say.

The blockbuster Boeing contract—alongside other significant recent wins like the contracts signed by United Auto Workers and the Teamsters and the wage hikes secured by the East Coast dockworkers—also may lead to emboldened unions seeking to maximize gains in future negotiations, said Angela B. Cornell, director of the Labor Law Clinic at Cornell Law School.

“There’s been so many incredibly successful strikes and successful bargaining outcomes, even without strikes, that unions do feel as if they have a little bit of renewed leverage,” she said. Despite union membership going down, “unions still, through creative and strategic planning, have been able to leverage the collective strength of their bargaining units.”

Union contracts signed this year have included historic wins for workers: average first-year pay raises and annual pay hikes in collective bargaining agreements ratified through the first half of this year represent the highest average wage increases negotiated in union contracts since Bloomberg Law started tracking wage settlements in 1988.

In the case of Boeing, workers have also said they play a critical role in helping the company recover from its economic misgivings. Boeing’s stock was on the way to its worst returns since 2008, Bloomberg News reported Tuesday.

Kelly Ortberg, Boeing’s CEO since August, said workers will be an integral part of the recovery in a statement Tuesday.

“We will only move forward by listening and working together,” Ortberg said. “There is much work ahead to return to the excellence that made Boeing an iconic company.”

‘Empowered’ Workers

Boeing workers were able to make significant inroads in their contract and get concessions beyond wage hikes. Boeing committed to 100% match up to 8% in the workers’ 401(k), which is significantly more than the average value of promised match at 4.6% of pay, according to a 2024 studyby Vanguard.

The contract also has strengthened overtime protections, allowing employees to work 160 overtime hours in a quarter before being excluded by management and it bans Boeing from requiring workers to begin earlier than their regular shift time during weekend overtime. It includes a provision lowering medical costs for workers too, cutting the monthly contribution for family coverage in one plan to $139.59 in 2025 from $153.96.

There was also nonmonetary gains such as a commitment to future work for the union.

“They really got much farther than we might have expected,” Cornell. “In addition to the financial gains, they were able to get unprecedented commitments on the part of the company for future manufacturing in Seattle, and that is really significant.”

Growing dissatisfaction and anger over the gulf between executive pay at large US corporations and workers has been driving the labor unrest seen over the past few years for contracts like this one, said Cornell. Since 1978, CEO compensation has soared over 1,000% compared to 24% for typical workers, according to a September reportfrom the left-leaning Economic Policy Institute.

That has workers demanding companies accept larger wage hikes and greater benefits during contract negotiations, Cornell added.

“It isn’t just union leadership, union members also feel more empowered,” she said. “These incredibly explosive CEO and upper echelon pay packages are not lost on the workers, and they really make it so much harder for companies to try to assert that they can’t do better on lifting pay.”

While CEO compensation may be high, that doesn’t justify the pay raises workers are asking for, said Jane B. Jacobs, a Tarter Krinsky & Drogin LLP partner. Wage hikes and benefits for tens of thousands of workers are more expensive than the chief executive’s pay, she said.

“If you wrote the chief executive salary down to $250,000 a year and divided everything else among the employees how much would that be? I can’t think very much,” Jacobs said. “Do I think it’s right executives are making a ton of money? No, but I think you’re comparing one executive to tens of thousands of employees.”

Labor Conditions Won’t Last Forever

Part of the reason workers have been willing to go on lengthy strikes is the tight US job market over the past couple of years that have given workers a edge in negotiations, said Douglas Holtz-Eakin, president of the right-leaning American Action Forum. The unemployment rate is historically low at 4.1% while job openings have also been high, often higher than the number of unemployed workers.

So while workers are currently more determined to cause economic disruption as part of the collective bargaining process, that may not be the case when the job market cools down, Holtz-Eakin said. Those numbers were due to the monetary and fiscal stimulus during the pandemic and they’re not coming back, he added.

“The labor market will not be near as tight as it has been over the past couple of years, and that has really empowered workers, unionized and not unionized, to demand more in way of compensation,” Holtz-Eakin said. “That’s going to change for sure.”