Wednesday, December 17, 2008

UAW Members Do Not Make $70 an Hour

From the comments (yes occasionally people actually post a comment and I do read them and think it's great when people weigh in) comes the oft repeated myth that unionized (United Auto Workers) auto workers are making $70 an hour or more.

This is not true. It is an easy number to get to and it is often thrown around by respectable journalists and pundits, ex cetera who should really know better. The $70 figure comes from adding up all of the money payed out by the auto company (any one of the big three) and then dividing it by the total number of hours worked. Unfortunately this includes the medical and pension benefits being paid out to retired UAW workers and ends up grossly overstating how much current employees are compensated. The actual hourly rate appears to be about $28 an hour inlcuding benefits brings that estimate up to the $35-40 an hour range which ends up being about $60,000 a year.

For further debunking and more on why it matters by actual economists and reporters and to see where I got my info please follow these links (many of them reference each other as well):

Jonathon Cohn, The New Republic - the most comprehensive and informative piece I've seen
Felix Salmon, Portfolio
Ezra Klein, The American Prospect
James Surowiecki, The New Yorker
Dean Bradley, The American Prospect - he's a little worked up and suggests that any reporter repeating the $70 an hour number should get an immediate 10% pay cut.

This isn't to say blindly that unions are all good and grand (although they did bring us the weekend) some unions do crappy things and some do great things and some even manage to do both, sometimes simultaniously. The bottome line is that the Republican Senators (mostly southerners without ties to Detroit) who insisted that the UAW take immediate pay cuts didn't insist that pay cuts be taken in the financial sector nor did they call for white collar paycuts among the big three. They just want to blame it on the UAW, and they're wrong.


  1. I stand corrected. Thats why I read this blog, to become more informed!

  2. Cool, I'm glad to have it be a conversation.

    Thanks for commenting.