For the past few weeks, media figures from all the networks, newspapers and talking heads have been repeating the misleading talking point that UAW members at the Big 3 make the equivalent of $73 an hour in salary and benefits. Media Matters has consistently corrected this (at the Washington Times), day (at Fox News) after day (at the Washington Times – again – and the Pittsburgh Tribune-Review). The organization even reported on Lars Larson disputing that he’d ever said that union auto workers make $70+ an hour.

Well, it must be getting through to someone, because Mike Barnicle finally got it right on Morning Joe at MSNBC. As the conversation turned once again to worker compensation at the Big 3, Barnicle interrupted to point out that the $74 figure does not, indeed, represent the compensation paid to UAW workers. In fact, Barnicle pointed out – and Scarborough concurred – that the hourly wage of workers on the assembly line is actually a much more reasonable $18-24 an hour and the total compensation paid to high seniority union workers (including benefits) is just over $40 per hour – not that far off from what workers for foreign auto makers in the U.S. are making. Barnicle even rightly pointed out that the additional padding in that $73 figure is “for things like health care for a guy that retired 25 years ago”.

Right. That $73 an hour per worker cost includes the legacy costs of UAW-supplied health care and retirement benefits for all living but retired union workers. Of course, if you listen to talk radio or Fox News, you’ve really only heard about the “Jobs Bank“, an agreement between the UAW and the automakers to pay laid-off workers 90% of their salary and continue to pay their health insurance. The Jobs Bank has been touted to death as a symbol of the greed of UAW and the excesses of the auto industry in general. Imagine – rather than lay people off, the auto makers were forced to pay these guys $28 an hour to sit around and do nothing because there wasn’t enough work for them to do.

All this talk of “legacy costs” and benefits like the Jobs Bank is designed to fire up anti-union sentiment and make it sound as if the workers are at fault for the collapse of the auto industry. They’re pointed to as “the reason that US auto makers can’t be competitive”. It’s been widely stated that these costs add more than $2,000 to the cost of manufacturing every single car made in the US – and that we, the consumers, are paying for it in the long run.

Some people are pointing out one obvious conclusion – that an enormous part of those costs are not borne by auto makers in foreign countries where health care is an accepted right of every citizen, so there is no cost to the company for health insurance for workers. The truth is that we collectively pay for the health insurance of not only UAW members, but of workers and employees in every single industry in the form of added costs passed on to the consumer. And because the health insurance industry and the health care industry are nearly all run by for-profit private companies, we pay a HELL of a lot for it.

According to the Bureau of Labor Statistics, in 2008 health care accounted for 8.4% of employee costs to industry – and with health insurance costs expected to rise by 10% in 2009, that percentage will rise to near 10% of total employee compensation. Those costs are, of course, passed on to consumers in the form of higher prices on consumer products and services. So we are all, in one way or another, subsidizing health insurance for US workers.

What would happen if the US actually sprung for real universal health care with costs covered by the government in the form of higher taxes for all? What would American industry be able to do if we took 10% of the cost of doing business right off the top of their expense sheet? Hire more workers? Pay higher wages? Invest in R&D? Just imagine if everything in the US suddenly cost 10% less to make?

Of course, that’s not quite the way it would happen. For one thing, there are millions of workers in the US that work part-time (often at two or more jobs to make ends meet) because companies can’t or won’t pay for the benefits associated with full-time employees. There are hundreds of thousands more workers who work through temp agencies, another way that employers avoid paying health care and other benefits. Still, it would make a significant dent in the cost of doing business in the US, and might entice some of those companies who have moved overseas to countries that pay for the health care of their citizens.

Powered by ScribeFire.


Name (required)

Email (required)


XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Share your wisdom