Delete comment from: Captain Capitalism
Over at The American Prospect, they contend the workers are not paid $70/hour.
http://www.prospect.org/csnc/blogs/beat_the_press_archive?month=11&year=2008&base_name=gm_auto_workers_are_not_paid_7
"How does the NYT get from $41 to $70? Well the trick is to add in GM's legacy costs, the pension and health care costs for retired workers. These legacy costs are a serious expense for GM, but this is not money being paid to current workers. The person on the line in 2008 is not benefiting from these legacy costs."
There is more discussion at Obsidian Wings about adding the cost of retiree plans as a component to the hourly compensation.
I think the important point is that companies like GM once had 400,000 workers and now they have 73,000 workers. Much fewer workers to absorb the retiree costs; however, it was the gains in efficency that permitted GM to have fewer workers. I would be more interested in knowing the cost of retiree healthcare as a percentage of GM revenue ($160 billion).
I still don't see that GM has a serious problem with compensation discrepancy or that it is as large a problem as some think it is.
Nov 23, 2008, 5:28:00 AM