December 10, 2008

I Can Hold It In No Longer - The $70/hour Myth

I swore to myself I would not post about this, but the ignorance being displayed by everyone (Congress mostly) has pushed me over the edge.

I watched both congressional hearings with the automotive CEO's last week. It was truely disgusting what some of the congress people were saying. One would think that if they were deciding on weither an industry lives or sending the US into a catastrophic depression they would do some homework first.

But nope, they just relied on lies and myths instead. And the worst of the congress people were the ones with foreign automakers in their state, gee wasn't hard to figure out why they want the domestics to fail.

Lets start with the $70/hour that the domestic workers make.


Domestic hourly wages are on the same level with Japanese plants.
Their hourly wages are within a couple dollars of each other, Big 3 are around $28 and the Big Foreign are $25.

The rest of the made up figure includes benefits, health insurance and pensions.

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, $28 per hour--and you get the $70 figure. Voila.

So we are suppose to believe that each worker on the line is getting double in benefits what they make per hour? If you take the actual benefits that the line worker is getting themself in health and pension you are really looking at around $10/hour extra.

Oh you can get to that $70 myth that everyone spreads if you add in the pension benefits that retirees are getting. Yes, those spreading the myth are adding in retiree benefits to current workers benefits and I am not talking about benefits those workers will get when they retire, that is already included in the $10 extra per hour.

So lets re-cap, the $70/hour myth is gotten to by adding what the line worker makes per hour plus health insurance plus what retires are making divided by only current hourly workers. So you all can get over yourselves that the Domestic workers are living high on the hog, they are making within a couple dollars per hour exactly what the foreigns are making.

Posted by Quality Weenie at December 10, 2008 09:49 AM | TrackBack