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Autoworkers make $145,000 a year?
February 27, 2009 - Jim Anderson
In recent months, you’ve probably heard politicians and commentators claim that U.S. autoworkers make more than $70 per hour.
Glenn (I like to put frosting on my exaggerations) Beck recently put it at $154 an hour.
Those misleading figures originated, in part, from a report last fall from the Heritage Foundation that included the cost of providing benefits to retirees.
The Heritage Foundation arrived at its figure by including the cost of health care, life insurance, vacation, pension and all other benefits — not only for current workers, but retirees as well. The total cost was then divided by the total number of hours worked by current employees and — ding, ding! — $75 an hour.
The actual wage cost for automakers is about $40 an hour when bonuses, overtime and vacation are included (yes, I’d like to make that much, too). Add in health, pension and other benefits and it’s about $55 an hour, according to a recent Barclays Capital analysis.
You get past $70 or $75 an hour only by adding the “legacy costs,” or the benefits paid to retirees.
Whether autoworkers are overpaid is a fair debate. But since current workers do not receive any of the compensation paid to retirees, it’s unfair to include that cost in describing what they earn. Do we ever use that same standard in describing what workers earn in any other industry?
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