Article 43


Monday, November 24, 2008

The $70-Per-Hour Lie

By brownsox
Daily Kos
November 21, 2008

HAVE YOU HEARD THE ONE ABOUT the UNION autoworker making more than $70 PER HOUR, forcing American auto companies into bankruptcy?

There are two very small PROBLEMS with that. First, there’s SOMETHING WRONG with workers making a good living? As wrong for a blue-collar worker to make $70 as for a CEO to make $11,000?

Second, IT’S NOT TRUE. Average wages for Big Three workers are around $28 per hour.

But then what’s the source of that $70 hourly figure? It didn’t come out of thin air. Analysts came up with it by including the cost of all employer-provided benefits--namely, health insurance and pensions--and then dividing by the number of workers. The result, they found, was that benefits for Big Three cost about $42 per hour, per employee. Add that to the wages--again, $24 per hour--and you get the $70 figure. Voila.

Except ... notice something weird about this calculation? It’s not as if each active worker is getting health benefits and pensions worth $42 per hour. That would come to nearly twice his or her wages. (Talk about gold-plated coverage!) Instead, each active worker is getting benefits equal only to a fraction of that--probably around $10 per hour, according to estimates from the International Motor Vehicle Program. The number only gets to $70 an hour if you include the cost of benefits for retirees--in other words, the cost of benefits for other people.

Rather slick and cheeky of them, it must be said, to craft this particular line of bull.

Needless to say, if we had universal healthcare, enemies of unions wouldn’t be able to tell this particular lie, and American auto companies would be doing a lot better financially. The plight of this industry should shore up our resolve for healthcare reform. And in the interim, as we watch one industry after another ask for government assistance, we ought not to place the blame for a single industry’s problems on the backs of its unionized workers.


Posted by Elvis on 11/24/08 •
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