More Class Hatred in the Washington Post
The Washington Post is very happy that conditions of the auto bailout are forcing the United Auto Workers to make further concessions. They devoted two news articles (one on the front page, the other on the front of the business section) and the lead editorial to the topic.
The front page article carried the headline: "UAW's Sacrifices Look to Some Like Surrender." The article included numerous comments touting the pact as a historic defeat for the union.
It also asserted that by eliminating the difference in compensation between union and non-union plants, the bailout "would render moot the union's fundamental purpose, some industry analysts and labor experts said." Actually, none of the labor experts cited in this article were identified as saying this.
Labor experts would know that non-union workers can be fired at any time the employer chooses to fire them. By contrast, the union protects workers from arbitrary dismissals. Labor experts know that job security is very important for people who depend on their job for their income, so it is unlikely that any labor expert would have said that there was no reason for a union to exist if it could not produce gains in compensation.
The business section article also touted the impact that the bailout conditions would have on the UAW, as demonstrated most clearly by the headline of the page 3 jump "With bailout, Downsizing Could Hasten the Demise of the UAW."
The Post editorial, after deploring the fact that bailout money was diverted from Wall Street to the real economy, celebrated the pay cuts that the bailout would impose on UAW workers. For some reason, the Post attaches enormous importance to reducing the pay of auto workers who earn $28 an hour. It shows no comparable concern for reducing the pay of auto industry executives to parity with their foreign competitors. (The top executives at Toyota, Honda, and other successful companies get paid in the neighborhood of $1-2 million a year. Unlike their U.S. counterparts, they don't get paychecks in the tens of millions of dollars even in the best years.) The Post has allso never felt the need to insist on large pay cuts for Wall Street executives even though their banks are now wards of the state.
--Dean Baker
Addendum: I neglected to check the Post's arithmetic in this editorial: big mistake. The Post told readers that pushing UAW workers to parity with workers at the transplants would save $800 a car.
Let's check that one. GM has around 80,000 UAW workers. (It may actually be closer to 75,000 these days.) These workers get average compensation of roughly $100k a year, for a total UAW wage bill of $8 billion. GM is currently selling 3 million cars a year, which translates into a UAW wage bill of $2,700 per car. Bringing UAW workers to parity with the transplants implies a cut of 10 percent, which comes to $270 a car. So, the WAPO's $800 number is off by a factor of close to 3.
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COMMENTS (73)
Your post's title says it all!
Posted by: EconDumbo | December 20, 2008 10:39 AM
Actually, I thought the front-page article was at least not completely one-sided against the union, as the editorials and business columnists usually are.
The news and opinion sections of the WaPo seem to be increasingly divergent these days (though maybe they were in the old days as well before it was available on line).
Posted by: skeptonomist | December 20, 2008 11:22 AM
EconDumbo: EXACTLY!
Posted by: Mike Meyer | December 20, 2008 11:27 AM
The business section article by Warren Brown you mention seemed to me much more honest about the impact on workers than you suggest. It pointed out that the UAW has been making concessions for years, and that the concessions forced on the UAW by the bailout will also limit what the non-unionized workers can get in future.
Posted by: Bob | December 20, 2008 11:30 AM
"...job security is very important for people who depend on their job for their income..." Most people depend on their job for their income, not just union workers. And those non-union workers never have that security, but still find a way to make do. All things being equal, it's good a good thing to protect workers from unnecessary dismissals. But too often, I've seen unions protect incompetent workers so that they are almost impossible to be fired. And not being able to upgrade a workforce keeps companies from becoming innovative.
Posted by: Harold Mandrew | December 20, 2008 11:43 AM
Workers everywhere in the world are already part of the global labor force, or world labor market.
It is then inevitable that all the salaries now tend to a world-average. For some, this means an increase of revenue, and for others, a decrease.
Bailout or not, union or not, nothing can stop that.
Be prepared !!
Posted by: Gerry Flaychy | December 20, 2008 12:24 PM
"those non-union workers never have that security"
They would if they all joined a union. Should all workers' advancement be negated because of the jealousy of non-union workers? Fostering that jealousy seems to be a main objective of the media at present.
Lack of innovation in the auto industry can't be blamed on the union. The incompetent executiveforces of these companies have yet to be "upgraded". The real owners of corporations do not have the power to fire executives. How about some agitation for reform of corporations rather than picking on the inconsequent flaws of unions?
Posted by: skeptonomist | December 20, 2008 12:38 PM
Much as I love your commentary, you miss the point on this one. While unions generate other benefits, recruiting would be nearly impossible if unions didn't deliver extra compensation. Even with a card check system.
And while unions do protect against arbitrary dismissal, they provide little defense against layoffs, plant closing etc., which are currently more relevant as a threat.
Posted by: nationreading bschooler | December 20, 2008 12:51 PM
WAPO hates them for their wages..gold plated my ass...beggar thy neighbor.
Entry-Level Wages
The entry-level wage structure will have a starting rate of $14.20 per hour and a full rate of $15.34 per hour. Entry-level workers will advance from the starting rate to the full rate for their classification in four progression increases, one every 26 weeks.
In addition, entry-level workers will receive annual raises through a new wage formula that will provide increases tied to either (a) the percentage increase in average hourly earnings, excluding overtime, of workers in the U.S. manufacturing sector or (b) the annual rate of inflation, whichever is greater, up to 3.75 percent. (If the wage formula generates an increase above 3.75 percent, the additional amount will be subject to a mutually-agreed disposition.) Increases will take effect in the first pay period of each calendar year.
In addition to annual wage formula increases, entry level workers with seniority as of the designated eligibility date will receive performance bonuses in each year of the four-year agreement. An entry-level worker’s performance bonus will be equal to 3 percent of qualified earnings during the previous 52 pay periods. Performance bonuses will be paid in May 2008, 2009, 2010 and 2011, based on April eligibility dates.
Entry-level workers are eligible for the Christmas bonus, as described on page 26.
Entry-Level Benefits
Entry-level workers will be covered by a modified benefit plan, including the following elements:
• A cash balance defined benefit retirement plan. Ford will deposit 6.4 percent of workers’ wages into a portable retirement plan, which will accrue interest tied to U.S. Treasury bonds. This plan provides for three-year vesting.
• Retirement health care fund. To help fund health care in retirement, Ford will contribute $1 an hour for each hour worked into each entry-level worker's TESPHE.
• Health care plan. Entry-level workers will be covered by the National PPO and will have annual in-network deductibles of $300 single/$600 family. Co-insurance will be 10 percent in-network, with an annual cap on out-of-pocket expenditures of $1,000 single/$2,000 family. To defray these costs, Ford will provide workers with $300 single/$600 family annually in a health care spending account. Entry-level workers will be eligible for dental coverage and a vision exam after three years, and for full vision coverage after five years.
• Supplemental Unemployment Benefits (SUB). Entry-level workers with at least one but less than three years of seniority will be eligible for 26 weeks of SUB. That increases to 52 weeks (which can be extended) for workers with three or more years of seniority.
Posted by: S Brennan | December 20, 2008 12:55 PM
The important difference between union and non-union systems is that unions generally work on strict seniority, while non-union employees can be laid off willy-nilly. Seniority systems protect older workers who, particularly in the present economy, will have great difficulty finding another job. In fact, some layoff patterns in the non-union sector have led to age discrimination lawsuits (which the laid off employees won).
And union grievance systems aren't for the protection of the worker who is a complete screw-up (leaving the shop steward thinking, what possessed you to do THAT??!!) but for the worker who is facing discrimination, arbitrary discipline and the other myriad indignities inflicted on workers all over the country.
Posted by: PeonInChief | December 20, 2008 4:25 PM
Workers everywhere in the world are already part of the global labor force, or world labor market.
It is then inevitable that all the salaries now tend to a world-average. For some, this means an increase of revenue, and for others, a decrease."
This would not be true for unskilled laborers, for example nannys, gardeners, waiters, dishwashers; if immigration was restricted. These, of course, are the citizens most in need of protection.
Posted by: Robert Hume | December 20, 2008 6:39 PM
Has Bush inadvertently(?) given the auto unions a powerful weapon in the Detroit bailout plan?
Treasury's bailout of GM and Chrysler will not be funded unless union workers agree to reduced compensation and other conditions to make them "competitive" with the US workforces of Nissan, Honda, and Toyota. But there is no requirement that executive pay, or compensation of thousands of non-union employees, be reduced to these "competitive" levels.
Clearly, this was a union-busting move by the Bush Administration, Congressional Republicans, and the Detroit auto companies, but it could backfire. The unions might condition their acceptance of these give-backs on the Companies' agreements (i) to reduce compensation by at least the same percentage for every non-union employee and (ii) not to use buyouts or post-termination benefit extensions to reduce the non-union workforce. The unions might also demand veto power over executive compensation in excess of a certain amount. How could the union-busters argue effectively that taxpayer money should be used to save Companies whose executives and non-union employees are unwilling to compete?
Of course it's possible the Bush Administration understands this full well and has deliberately planted this time bomb to go off in the first two months of the Obama Administration.
Summary of the relevant parts of the Term Sheets is here. http://www.realitybase.org/journal/2008/12/20/bush-has-inadvertently-given-the-auto-unions-a-powerful-weap.html
Posted by: Roger Chittum | December 20, 2008 7:36 PM
To take jobs in USA and bring them to workers of an other country, or take workers of an other country and bring them in USA to do the jobs that are here, is the very same thing i.e. to give US jobs to workers of an other country.
Both operations are a way to enforce the globalisation of the labor market.
And it is not done only in USA. If it was done only in USA, we could close the frontiers, both way, and the labor market of the USA would stay the labor market of the USA.
But can the USA really do it? That is the question !
Posted by: Gerry Flaychy | December 20, 2008 7:53 PM
In the bailout plan, is there a clause saying that the profit on every car sold must be the same for every cars manufacturer in the USA, so that every cars manufacturer in USA stay "competitive " with each other?
And what about the cars not manufactured in USA but sold in USA: how the bailout plan assure everybody that they too will be "competitives" ?
And too, what about the price of every car: should it be too the same for any car, whatever the size, the performance, etc..., for the sake of "competitivity" ?
Posted by: Gerry Flaychy | December 20, 2008 8:21 PM
I was curious about the discrepancy in labor costs and found the following
http://msl1.mit.edu/classes/esd123/vyas.pdf
which gives the labor cost as 6.5% of MSRP, which is twice the manufacturing cost (lots of other people getting cuts). Some other sources seem to be consistent with this, that is labor less than 15% of manufacturing cost. This would give an even smaller difference than Dean calculates.
But think about labor being 6.5% of selling price. How does this justify the attention being paid in the media, not to mention Congress, to the "necessity" for the UAW to make concessions? Can't the business geniuses who draw the big bucks find some more likely places to cut costs?
Posted by: skeptonomist | December 20, 2008 11:28 PM
In work places decision making systemes we would call fascist or totalitarian are still widely considered accepetable.
Unions undercut some, by no mean all, the dictatorial powers of owners and managers.
That is why they are dispised.
Of course it is very usefull and necesaary to make the points Dean Baker, JIm Stanford and others are making about labor costs, but at times like these - when the "risk takers" are being exposed as utter frauds - it would be good to get beyond that and point out that democracy should extend to the workplace.
Posted by: joe emersberger | December 21, 2008 12:06 AM
What you're missing is, its not the hourly wage alone. Point one, you cannot run a competitive auto company and pay the workers $100k a year. Point two, even if you pay them normal wages, you can't load the retiree benefits they've agreed to onto the price of the cars. Point three, even if you get rid of this in some way, you still will not succeed in returning to profit if you keep the restrictive work practices Detroit has agreed to.
And even after that, you have to make cars people want to buy. Cleaning up the above will help because it will enable you to restructure production lines and introduce new products faster. But you still have to get those products right. This is going to take wholesale replacement of existing management, and a dramatic reduction of management overheads.
Posted by: anon | December 21, 2008 4:29 AM
Daer anaon (why are people so afraid to use their names?)
The workers could work for free for a year and not come close ro resuing the big 3. Double the wages to acount for benefits and pensions and your still don't arrive at a significant portion of the price of the car.
Your claim about "restrictive work practices" is exteremely vague. Whatever you mean the productivity gap between the big 3 and other carmakers has been closed. And with the latest UAW contract Toyota sets the bar for wages according to the Wall Street Journal - in an editorial in which they praised the UAW for the concessions they made(again - BEFORE the crisis hit).
Your only valid point is about the product choice which is (unfortunately) out of workers's hands. However, even Toyota is struggling. The financial crisis is so extreme that the big 3 CEOs could have done just about everything right (and paid themselves much less) and still wound up in major trouble - yet who is talking seriously about wholesale maamgement replacement or meaninful concessions in the financial industry.
The hypocrisy is stunning.
Hwtat is being graphically exposed is the "private industry" is not really private. It is essential public industry with negligible public accountability.
Posted by: Joe Emersberger | December 21, 2008 11:20 AM
So even if their $800 figure were correct, $800 is ridiculous. You would laugh in GM's face if they advertised $800 cash back on a car.
People are losing jobs and their stock and housing wealth just poofed into thin air. Nobody is buying cars now, and nobody would buy them for $800 less.
Posted by: Aatos | December 21, 2008 12:19 PM
"...Most people depend on their job for their income, not just union workers. And those non-union workers never have that security..."
In 1979 UAW membersip was 1.5 million. Today, about 500,000.
Union job security is illusionary.
Posted by: alcibiades | December 21, 2008 12:43 PM
Oh the horror, those incompetent workers 'protected' from their incompetence by the evil unions, how can we stand it? How can we sit idly by and watch while incompetent people ruin the business they were supposed to serve? How can we sit idly by and 'let' them destroy the society of good honest god fearing owners of capital. Doesn't anyone care anymore about the rights of owners to perpetual wealth and extravagent opportunities inherent in our system? Why you'd think they believed that owners and managers were responsible for the products they produce and the influence they have over the legislative and legal and financial functioning of our system. This country is supposed to be a safe place for a man to have a societally sanctioned lock on wealth and power -- what has become of our great and glorious aristocracy? How can we hope to face the future with all these entrenched unions free from the consequences of their evil acts?
Posted by: Anonymous | December 21, 2008 12:58 PM
Seems like some people these days think that management ought to be held responsible for their incompetence -- what a criminal mind set. They are communists and we should have them all arrested and shipped to Guantanamo
PS: the last comment was mine too, forgot to sign it.
Posted by: VoiceFromTheWilderness | December 21, 2008 1:00 PM
Isn't claiming that retiree benefits are loaded onto the prices of cars counting those costs twice? The cost of those benefits for current retirees should have been factored into the cars they produced, not the cars being produced now. Or am I missing something?
Posted by: PeonInChief | December 21, 2008 2:29 PM
QUOTE
"...Most people depend on their job for their income, not just union workers. And those non-union workers never have that security..."
In 1979 UAW membersip was 1.5 million. Today, about 500,000.
Union job security is illusionary
[UNQUOTE
Over the past 30 years private sector unionization rates have dropped from roughly 30% to about 7%.
So yes, unions have been weakened. That doesn't mean they don't deliver benefits. There is, after all, a reason that businesses hate them - pricisely becasue they erode the dictatorial power of owners and managers.
At the same time unions have been weakened working class wages have stagnated and job security greatly eroded - some thing Geenspan and other elites openely celebrated.
If workers want to improve their wages and job security they will obvioulsy revitalized unions.
In fact, despite a relentless propaganda campaign, most people in the US view unions favorably.(See Dick Meister's article on Znet from a day ago).
The problem, as usual in elite dominated democracies, is that elite opinion counts for much more than public opinion.
Posted by: joe emersberger | December 21, 2008 3:13 PM
People cannot buy cars if their wages only cover rent and groceries. Cannot buy a house without a subprime IF they cannot save up a down payment. The elites are screwing themselves when they fight to keep the worker down.
Posted by: Mike Meyer | December 21, 2008 3:38 PM
[quote]
The elites are screwing themselves when they fight to keep the worker down.
[unquote]
Unfortunately not - as the last 30 years have shown. Elites have been screwing workers and doing very well for themselves. When the policies they promote blow up in an undeniably obvious ways (finanicial deregulation, asset bubbles, The Iraq war) the public has been there to pick up the tab - an in the case of autoworkers even take wage concessions in addition to the diversion of their tax dollars to bail out elites.
The rich have been on quote a roll for the last 30 years. It won't end until workers begin to fight back efffectively and that will require a revitalized labor movement.
As I have mentioned above, it is also crucial that people begin to question the illegitimat authority of owners and managers.
The argument for deomcracy has been won in the public arean but in our workplaces we continue to put up with dictatorship.
Posted by: joe emersberger | December 21, 2008 3:56 PM
Dean Baker puts politics and leftist ideology first, always. The Marxist U.S.S.R. had economists like that.
Posted by: JimPC | December 21, 2008 11:57 PM
Dean,
The non-response on my previous post was interesting, but it is deafening at the GM figure you use above. $100k per UAW worker is in the top quintile of the US income distribution scale. They are mainly high school graduates. I note that a college graduate at the median makes $70k/year.
So, what is the argument - the UAW should not have their pay decreased, but the doctors and lawyers with substantially more educational investment should?
I would sincerely like to understand your position in light of what I believe to be the facts.
Posted by: TC | December 22, 2008 12:05 AM
Hey TC:
Do want society to democratically decide how much people get paid based on how hard they work, how much education they have and whatever other criteria they deam reasonable?
Is that your argumet?
Posted by: joe emersberger | December 22, 2008 12:25 AM
Joe-
What I am driving at above is that Dean has argued in various recent threads that lawyers and doctors are overpaid, apparently due to licensing. I don't believe it, but that's his argument.
But he also argues that the UAW is not overpaid and should not have their wages reduced in return for a government bailout. Based on the figures Dean and I use above, I believe it to be pretty clear that the UAW is overpaid by any measure.
So, I don't believe you can have it both ways - criticizing one group while not acknowledging that another has a similar issue.
All of that said, to your actual question, yes I do believe that the MARKET should set wages based on whatever criteria they choose. The market appears to use education level, among other criteria such as experience and skill set, as the primary determinants of wages.
Posted by: TC | December 22, 2008 9:23 AM
The market don't take decisions. The market is only a result of decisions, decisions made by a very big lot of peoples.
But it makes a condition in wich each new decision to be made have to take in account this condition.
And every new decision change the previous condition in a new one wich in turn have to be taken in account by people who have decisions to make.
And so on.
Condition influence decisions, but it is the people who takes decisions.
Posted by: Gerry Flaychy | December 22, 2008 11:29 AM
Automobile CEO in Japan not only make far less than their American counterparts, presidents of corporations are prohibited by law from receiving bonuses.
Posted by: L D Nelson | December 22, 2008 12:20 PM
TC,
You can choose not to believe that Americans are overpaid due to licensing and other factors, but the reality is that they are. If you look at the facts of how UAW wages affect the American consumer versus how professionals' wages affect the consumer, you'd find that Dean is quite logical in focusing more on the latter.
If you read the Conservative Nanny State, you'll discover that as of 2006, the average doctor in the U.S. earned $100,000 more than the average European doctor. This wage disparity costs American consumers $80 billion a year. Given that similar restrictions exist for lawyers, accountants, etc, one could assume the total cost to the consumer of high professional wages is substantially larger. In the case of the auto industry, however, Dean pointed out above that higher wages at American-owned plants costs the consumer $270 per car. Given that the Big 3 sold about 8.5 million cars in the U.S. last year, that works out to about $2.3 Billion dollars in additional costs to the consumer.
In other words, higher doctor wages cost us 34 times what higher UAW wages cost us. That seems pretty significant to me.
Posted by: Jimmy | December 22, 2008 1:17 PM
*Edit, by Americans I mean American professionals
Posted by: Jimmy | December 22, 2008 1:19 PM
$100k per UAW worker is in the top quintile of the US income distribution scale. They are mainly high school graduates. I note that a college graduate at the median makes $70k/year.
The 100k includes benefits, the salary alone is probably less than 60k. The figure for the median college graduate is probably taxable income, benefits not included.
Posted by: piglet | December 22, 2008 2:34 PM
While I don't think auto workers are getting paid "too much", I do think their industry cannot and should not be saved. Here's why.
Posted by: piglet | December 22, 2008 2:37 PM
How do you get from $28 per hour (which I assume is wages only) to $100,000 per year total compensation? Since when are benefits (payable to the workers themselves) over 70% of wages? Shouldn't it be more like $75,000 per year in gross compensation?
Posted by: urban legend | December 22, 2008 4:07 PM
To be better paid doesn't mean to be necessarily overpaid.
Instead, it's perhaps the others that are underpaid !
Posted by: Gerry Flaychy | December 22, 2008 4:12 PM
Amen to Gerry!
It never ceases to amaze me how preternaturally stupid the wealthy in this country are. Let's make that our meme. They simply cannot connect the dots between workers who can have a part in looking out for themselves, better incomes for the middle class and below, higher confidence that translates into a strong economy, and a bigger pie that means the wealthy will do better than they do when the poor and middle class are treated like dirt. Of course, that probably leads us to the number one objective of the very conservative wealthy: not to have more wealth, even for their kids, but for the pleasure of being able to treat some people like dirt.
Posted by: urban legend | December 22, 2008 4:33 PM
And by the way, has anyone figured out that including pensions and healthcare for retired autoworkers in the per-worker calculations only for the American companies and not for their Japanese-based counterparts is comparing apples and oranges. Japanese companies who opened plants in the U.S. only in the last couple of decades have a similar legacy of workers in Japan and other countries (who may or may not be, but probably are, treated as reasonably as American autoworkers have been) to be accounted for. Apparently they are not accounted for by charging their costs against workers for the purpose of making bogus arguments of lucrative incomes of American workers.
It’s up to us to make most Americans understand how much these anti-union conservatives genuinely despise ordinary American workers. They won't become as isolated as they should be unless liberals do their job.
Posted by: urban legend | December 22, 2008 4:44 PM
And has anyone figured out that by charging the cost of pensions and healthcare for retired employees against current workers, and computing a per worker labor cost that includes the legacy cost in order to show how inefficient the industry is, the company that becomes more efficient by improving productivity – making more cars with fewer workers – becomes less efficient under this utterly bogus formula?
Imagine this: including legacy costs along with current benefits bumps up worker compensation to $73 per hour. Then lie through your teeth, assume the stupidity of most Americans, and hope to make them think that’s how much the autoworkers “are being paid.” Watch the mainstream media, which so often makes the liars look brilliant, parrot such ridiculous claims.
And then consider this: if GM succeeds in adding efficient assembly lines that means a bunch of plants can make the same number of cars with 80,000 workers instead of 100,000, those 80,000 still have to “carry” all those legacy costs, which in the aggregate do not change. This, of course, means the amount of legacy costs per worker will skyrocket. So which is it when you improve productivity, more efficient or less efficient? Conservatives are simply too stupid to know the difference.
Posted by: Anonymous | December 22, 2008 5:03 PM
TC,
I asked if you belive people should DEMOCRATICALLY decide how much people should get paid.
To that you replied
"yes I do believe that the MARKET should set wages based on whatever criteria they choose."
That shows you don't understand what the MARLKET is - a system of one dollar one vote. It can only approach a democratic system to the extent that income and wealth inequality are eliminated - something that isn't even close to being true in the US.
Moreover, markets (unless couterbalanced by unions, and public policy of various kinds) would make inequality much worse as the people with the most votes (dollars) in the market vote to give themselves even more votes.
If people voted in a referendum (based on one person one vote) on how much CEO's, professional athletes, doctors and dishwashers should be paid the results woud not be what the "market" decides.
And again (to veryone not just "TC") why don't people use their real names?
Posted by: joe emersberger | December 22, 2008 5:18 PM
If you don't believe Dean's math, look at the UAW's analysis of labor costs from 2006, which gives a number remarkably similar:
In 2006 a typical UAW-represented assembler at GM earned $27.81 per hour of straight-time labor. A typical UAW-represented skilled-trades worker at GM earned $32.32 per hour of straight-time labor.... In addition to regular hourly pay, the labor cost figures cited by the companies include... overtime, shift premiums and the costs of negotiated benefits such as holidays, vacations, health care, pensions and education and training. It also includes statutory costs, which employers are required to pay by law, such as federal contributions for Social Security and Medicare, and state payments to workers’ compensation and unemployment insurance funds. The highest figures sometimes cited also include the benefit costs of retirees who are no longer on the payroll.
The total labor cost of a new vehicle produced in the United States is about $2,400... This represents 8.4 percent of the typical $28,4513 price of a new vehicle in 2006.
Posted by: jay | December 22, 2008 5:19 PM
Thanks for the link Jay,
Looking it over I notice that the $2400 figure includes "salalried" employees in the plants which may therefore include management employees such as supervisors and even the plant manager.
Another very significant piece of information provided is that "According to the U.S. Census Bureau, the typical autoworker produces value added worth $206 per worker per hour"
This goes back to thte way the "market" allocates resources. Some industries are highly productive because of market decisions about what to purchase (for example cars) and where to allocate capital goods (assembly plants). That is why workers lucky enough to work in highly productive industries can obtain a great deal of bargaining power if they are organized.
Posted by: joe emersberger | December 22, 2008 7:49 PM
Joe-
I have no idea what dollar per vote "democracy" in a market economy means. If you were to buy, for example, beer - say, Sierra Nevada versus Pabst - would you expect to pay the same price? Why would you expect the market to be any different with workers?
That's market economics. You are apparently against it and that's fine.
Posted by: TC | December 23, 2008 12:35 PM
Jimmy-
Ok, let's use your figures:
"Dean pointed out above that higher wages at American-owned plants costs the consumer $270 per car. Given that the Big 3 sold about 8.5 million cars in the U.S. last year, that works out to about $2.3 Billion dollars in additional costs to the consumer."
So implicitly you are agreeing that wages are high.
I have no idea where you get your comment on the docs. I believe most docs earn somewhere between 200-300K (guesstimate), which is distinctly not 34x the average auto worker.
Posted by: TC | December 23, 2008 12:43 PM
Piglet-
I agree with your comments on benefits and the $70k figure. I looked for the data of all in pay, I know it exists, but couldn't find it.
However, I doubt that the $70k figure plus benefits is any more than the UAW's $100k. It's probably $85-90k for a college worker.
I don't think this diminishes my point, not that you were arguing that.
Thanks for a thoughtful comment.
Posted by: TC | December 23, 2008 12:47 PM
TC writes
"Joe-
I have no idea what dollar per vote "democracy" in a market economy means. If you were to buy, for example, beer - say, Sierra Nevada versus Pabst - would you expect to pay the same price? Why would you expect the market to be any different with workers? "
TC, again you show that you don't understand what the market is - a voting system.
People with vote with their pocketbooks on which products they will buy and on where they will invest. That voting system determines prices - and wages. It is a system which obviously favors those who have the most in their pocketbooks - i.e. the most votes in the marketplace.
You can find this explained in any intro level exconomics textbook.
See for example Economics: An introductory analysis by Paul A Samulelson and anthony Scott.
On page 43 they make the point
"A rich man's dog may receive the milk that a poor child needs to avoid rickets. Why? Because supply and demand are working badly? No. Because aution markets are doing what they are designed to do - putting goods in the hands of those who can pay the most, who have the most mponey votes."
Fortunately we don't rely exclsuively on markets or we'd all would be much worse off - including the weathy for various reasons.
Markets are grotesquely undeomcrtic in nature as explained above. Please understand the systemn you defend. You might not want to defend it once you do.
Posted by: joe emersberger | December 23, 2008 4:23 PM
Joe-
You are going to quote page 43 of an intro econ book to give me a definition? You clearly have never read an econ book. I was an econ major in college. Here is the definition:
"Economics is the social science that studies the production, distribution, and consumption of goods and services."
That would be called a market.
Done commenting on your points. They make no sense.
Posted by: TC | December 23, 2008 5:12 PM
TC says
"Joe-
You are going to quote page 43 of an intro econ book to give me a definition?"
Yup, to explain to you what the market is becasue you clearly don't know - or perhaps you're in denial becasue you can't accept the undemocratic nature of markets.
TC says "You clearly have never read an econ book. I was an econ major in college."
Actually I have - the one I cited among others. If you were indeed an econ major than I suspect denial, more than misunderstanding, is the root cause of the nonsense you are writing about markets. Sorry to be harsh, but I must be honest.
TC says
"Here is the definition:
"Economics is the social science that studies the production, distribution, and consumption of goods and services."
That would be called a market."
I'm emabraased for you. You give a generic definition of "economics" and say that it is th edefinition of a "market".
By that logic there was no such thing as economics in the pre-capitalist era, or in any communist country. You may not like other economic systems. That doesn't excuse conflating the market with economics.
TC says
"Done commenting on your points. They make no sense."
Fine with me. Hope you learn what the market is one day.
Posted by: Joe emersberger | December 23, 2008 9:53 PM
This is not true. Hey, even I have pointed it out several times, and I'm not here all the time and a far from an expert -- in other words anyone with a passing knowledge of this issue should know this already.
Posted by: 广告笔 | December 27, 2008 2:56 AM
Another very significant piece of information provided is that "According to the U.S. Census Bureau, the typical autoworker produces value added worth $206 per worker per hour"
Posted by: شات | March 8, 2009 5:36 PM
Hey TC:
Do want society to democratically decide how much people get paid based on how hard they work, how much education they have and whatever other criteria they deam reasonable?
Posted by: شات | May 22, 2009 6:02 AM
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Posted by: تحميل 10 ملفات | August 25, 2009 11:15 AM
The total labor cost of a new vehicle produced in the United States is about $2,400... This represents 8.4 percent of the typical $28,4513 price of a new vehicle in 2006.
Posted by: منتديات | September 23, 2009 4:38 AM
Fortunately we don't rely exclsuively on markets or we'd all would be much worse off - including the weathy for various reasons.
Posted by: مركز تحميل | September 23, 2009 4:41 AM
The Washington Post is very happy that conditions of the auto bailout are forcing the United Auto Workers to make further concessions. They devoted two news articles (one on the front page, the other on the front of the business section) and the lead editorial to the topic.
Posted by: Sohbet Odaları | October 19, 2009 1:57 AM
The Washington Post is very happy that conditions of the auto bailout are forcing the United Auto Workers to make further concessions. They devoted two news articles (one on the front page, the other on the front of the business section) and the lead editorial to the topic.
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Posted by: العاب | October 26, 2009 8:59 AM
They devoted two news articles (one on the front page, the other on the front of the business section) and the lead editorial to the topic.
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