$73/hour DEBUNKED

[LSK]

Figuring out labour costs is tremendously complicated because the contract has many provisions that change based on U.S. auto sales and production rates. Also, GM is estimating costs for the Japanese automakers.

But GM, which negotiated the four-year deal that serves as a template for UAW deals with Chrysler and Ford, says its total hourly labour costs dropped six per cent this year from pre-contract levels, from $73.26 in 2006 to around $69 per hour. The new cost includes wages of $29.78 per hour, plus benefits, pensions and the cost of providing health care to more than 432,000 GM retirees, GM spokesman Tony Sapienza said.

The total cost will drop to $62 per hour in 2010 when the linchpin of the contract - a UAW administered trust fund - starts paying retiree health care costs.


http://www.google.com/hostednews/canadianpress/article/ALeqM5gN_RRvKZJznG4eQ4w1jfs32SK-xQ

So that is NOT $73/hour, that is 29.78 + benefits + pensions + cost of providing healthcare for RETIREES.

[The_Casual_Observer]

1. I don't think anybody is getting rich making $30.00/hr anymore.

[marketcrazy1]

3. and

what percentage of workers are even making that 29.78 per hour?? more than half/less than half???

[BOSSHOG]

4. That's less then 60K a year

based on 40 hour week and no overtime and before taxes. That ain't the kinda coin that makes one rich. But dumbasses who make less then that feel free to bash unions because dumbasses have conservative values.

[LSK]

5. I calculate $61,942.40

29.78 x 40 x 52

[BOSSHOG]

8. I did

30 X 160 X 12. Your is more accurate. But it still ain't enough to have that summer home in the Hamptons.

[The_Casual_Observer]

19. It's not enough to ever even see the Hamptons.

[Phred42]

27. MIght have to sell the Citation

[BOSSHOG]

2. My conservative neighbor was bashing the UAW

I asked him if the unions were the reason the auto industry was in trouble wouldn't they have folded along time ago? No answer.

It must be sad being a part of the right wing noise machine, making a living by making shit up because you know how fucking stupid your audience is.

[AllentownJake]

17. Hannity was criticising the democrats

for not being proactive enough with regulation during their 2 years in control of congress and citing it as the reason for the economic crisis.

It was one of those 1984 moments.

[JHB]

6. Anyone know if they're lumping executive pensions in with employee pensions...

...to inflate alleged union costs?

[zbdent]

7. please ... you're expecting more intelligence from people who think

that you divide 700,000,000,000 by 300,000,000 and get $160,000 per ... (it's $2333 per ... still nothing to sneeze at, but not enough to buy a reasonable home ...)

[yodoobo]

9. $73 vs $69 isn't that large of a debunking

I keep hearing this $70'ish figure and people freaking out about it. So what its not that big of a number if you put it in context.

Everyone's cost to employer is always much larger than they actually earn.

The number has always been presented in the context of fully laden, which is the norm when talking about employee expenses in any accounting sense.

Your post does provide a refinement that its actually $69hr, with $29.78 paid in actual wages. Not a big difference, but certainly more accurate.

[LSK]

11. the difference is the 73 or 69 number includes Retiree healthcare

The workers working there now are not getting retiree healthcare. The number also includes their pension and healthcare costs and whatever benefits.

My company partially pays for my healthcare and matches my 401k but those numbers are not included in my annual salary number.

[yodoobo]

14. Of course it does.

Accrual of unused retirement benefits, when they will be paid when you are retired and working zero hours would be the proper way to do this from an accounting standpoint. The money to pay a pension doesn't just magically appear on the company books when you turn 65.

I understand your point about 401k. But comparing a defined benefit plan (pension which is supported by contributions made before and after retirement), with a defined contributions plan (funded only by contributions made before retirement) is comparing apples and oranges.

Additionally, your annual salary number is not the same as your fully burdened expense. Your fully burdened expense is what you cost your employer. Your salary is what you earn.

There seems to be this meme, by the right, and strangely by the left, that auto workers are not worth $70 an hour, therefore the number must be either false, or outrageous.

When I was much younger I worked an auto assembly line. Its damn hard work. Frankly they SHOULD be making $70 an hour in cash plus more in benefits.

[LSK]

16. yes but when people talk about salaries, they talk about a number + benefits

They never talk about what those benefits cost the company. Go look at any job ad and its X Salary + benefits. Every other job treats it like this, but when it comes to union auto workers, they treat their pay differently. Do you think that is fair?

[yodoobo]

21. Depends on the context.

If you are talking about profit and loss and how much the company is spending, you talk about actual real costs. Those extra costs about salary are very real and must be paid.

If you are talking about getting a job there, and are comparing your salary vs working at some other place, then you talk about salary + benefits.

Look I understand where you are coming from. I personally detest GM management and I'm speaking from very personal experience.

The problem comes from folks mixing and matching those contexts - many times to advance their pet point. And yes, that is not fair.

[Nederland]

10. Semantics

The $73/hour number includes benefits pension and healthcare. It is fair to include these things because they do in fact cost the company money and do in fact benefit the employee (hence the term "benefits"). I do find it fascinating that of the total compensation that an autoworker receives, more than half is non-salary. I'm not sure that you'd find that in any other industry.

[LSK]

12. the number includes retiree healthcare, which inflates the number

[Nederland]

15. By how much?

How much goes to retirees? Most importantly, why shouldn't it count? The point of those throwing around the $73 number is to show that the US auto industry has extremely high labor costs. Like it or not, money going to retirees is a labor cost.

[LSK]

18. because people are going around saying Workers make $73/hour

But no other discussion of worker pay involves the cost to the company as the number you are paid. Every other discussion involves some yearly salary + benefits. But when talking about Union workers, its a different number and people complain about it.

Look at any classifieds section and all the numbers are listed as salary + benefits. The number posted in those ads are not the number that costs the company. Its a different number.

When I have a review or a raise, the number I am told is only my salary. I do not know exactly what my total cost is to the company.

[Nederland]

24. I see your point

But perhaps we should use the total benefits number for every comparision. Until now, I had no idea that UAW worker received such incredible benefits. Until now, I mistakenly thought that Walmart workers (who average $9.68 an hour) didn't make much less than starting UAW workers. I now realize that UAW workers make much, much more--a tribute to the power of the unions.

[dems_rightnow]

25. Current workers will retire someday..

... and presumably get healthcare benefits. It's only logical to include healthcare benefits in the total cost.

[madrchsod]

13. there`s a two tier wage system...

the total wage and comp package can be rigged anyway to prove a point.

the issue is whether employees have to sacrifice anymore their wages and benefits

[LSK]

20. yes there is, but union workers are labeled one way

While the entire rest of the working world is labeled a different way. I am saying it is not a fair comparison. I know I make X per year + health benefits + 401k matching, however I do not add them all up to say I make this much, I say or am told I make X per year. However when it comes to Union Auto workers, they are using the other number and then complaining that they make too much.

Its not a fair comparison.

[JHB]

22. Also (as i noted above), does the pension cost only include employees...

...such as retired UAW workers, or are exorbitant executive pension packages lumped in there for accounting purposes? That would inflate the number too.

[LSK]

23. I do not think those include executive costs because those numbers are from the union negotiation

[Phred42]

26. Here: OLbermann kicked the crap out of that one in less than 2 mins last week

Olbermann Exposes Myth Of Auto Workers' Average $70/Hr. Salary
http://www.theliberalcurmudgeon.com/2008/11/olbermann-exposes-myth-of-auto-workers.html

On "Countdown," Keith Olbermann's "Worst Person In The World" for November 26 was Andrew Ross Sorkin and The New York Times for starting the myth that the average worker at General Motors earns an average of $70 per hour.

This falsehood has been perpetuated mainly by right-wing commentators, who are always ready to condemn labor unions and the workers they represent but have little to say about skyrocketing CEO salaries, along with fat bonuses that are rewarded no matter how poorly industries perform. In the case of the auto industry, it wasn't the workers who made the poor business decisions to keep producing gas guzzlers and ignore the need for more fuel-efficient vehicles......more