Article 43


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 •
Link to this articleLink to this article and comments
  1. The problems with American carmakers

    By Fester
    December 23, 2008

    Everyone KNOWS the problem with the American auto industry is a combination of the UAW getting paid too much to do difficult and highly skilled work, retirees not wanting to eat dog food after being promised that deferring wages in the past for a pension in the present combined with crappy engineering that can not produce a world class and profitable medium or small sized car.

    Toyota looks to have its first lost since before Pearl Harbor despite not employing a signficant number of UAW workers. Toyota is also considering LAYING OFF a decent chunk of its non-UAW North American workforce --- it is still the union’s fault though!

    And those Ford engineers just completely suck --- look at the FORD FUSION in USA Today ----

    The Ford Fusion hybrid will be the most fuel-efficient midsize sedan on the market when it arrives this spring, clocking in at 41 miles per gallon, according to data given to Ford Motor by the Environmental Protection Agency.

    That will make it the second-most fuel-efficient vehicle on the road, according to a ranking published on the EPA’s website, behind the smaller Toyota Prius and ahead of the smaller Honda Civic hybrid....

    The automakers have taken a beating in the public eye this fall as they pleaded their case for a bailout in front of Congress, with many politicians chiding them for not producing green enough cars. Having cars that get class-leading mileage, like the Fusion hybrid, can change those perceptions, Berkov says. Praveen Cherian, engineering team leader for the Ford Fusion, says the automaker was able to get Fusion’s mileage to over 40 miles per gallon by taking a lot of little steps.

    Whoops --- maybe there is something systemic going on here…

    Nahh, that would require nuance, canít have that.


    Posted by Burned Out Baby Boomer  on  12/25/08






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