“Mathematically and intellectually dishonest” says Keith Olbermann Nov. 24 on MSNBC about the figure of $70/hour allegedly made by autoworker. He quotes the Center for Automotive Research’s figure of $28/hour, and adds $10 for benefits for a fully loaded $38/hour.
He says the $70/hour includes pensions of currently employed workers, plus pensions and benefits being paid to retirees and surviving spouses. If you divide that by all the hours worked in the time period under consideration, you get something like $70. This falls in Mark Twain’s category of statistics he called “damned lies.”
I didn’t check out Olbermann's math, but I’m sure MSNBC has some sort of fact checking process. Portraying autoworkers as greedy and overpaid is propaganda, pure and simple. Millions of Americans getting by on $10-15/hour would develop a lot of animosity to automotive workers hearing that figure, not to mention managers imagining having to carry a payroll like that.
Yes, the union has gotten generous pay for their members. Maybe more than they ought to get, by some standards, though not the millions paid to higher-ups.)
This is as ridiculous as calculating labor cost as a percentage of a vehicle’s cost. Wouldn’t the figure go up and down as fewer or more vehicles are made? Labor is a step variable cost, not an infinitely variable cost. You don’t add or subtract workers one-by-one according to demand.
As far as I know, and I’ve looked, the auto industry does not reveal the proportions of various categories of total cost of producing vehicles. I have a sneaking suspicion that, though legacy costs are higher than the transplants, things like logistics and warehousing cost far more than direct labor. My guess is that white collar and managerial costs are likely to dwarf the cost of hourly labor. We hear that parts cost different percentages of a total vehicle’s cost, but not what purchased parts, hid as inventory “assets,” make up in the overall consumers of cash. There’s a heck of a lot of waste in the system outside the cost of the workforce that builds cars.
I got this from the UAW’s website. Partisan of course, but Keith Olbermann is probably not being paid by the union to investigate claims of extravagant pay for autoworkers. You can watch the video of his report at:
MSNBC's Keith Olbermann on autoworker pay