Really, it's not that hard folks! Base pay in the manufacturing industry, for the workers that actually make something (value added), is either determined by company-issued pay scales each year, or is defined by formal contracts, if the workforce is represented by a union.
When we talk about a factory-worker's pay -- it is always in terms on dollars per hour -- a variable wage paid for actual hours worked. So when we try to compare wages for all the hard-working folks in the service sector and manufacturing industries, we must use a comparable baseline. Remember the old apple vs. apples , not apples vs. oranges metaphor .
Seems that some of those well-paid mainstream media folks, on both the right and left, can't do the math. Duh-oh!
So, Mr. Adam Sorkin at the NYT , in an attempt to have some fun with numbers, and gee .... maybe to create an attention getting headline (ya think!?) -- takes all known hourly employee costs (The Numerator) adding current hourly wages, PLUS all current employee medical and pension benefit costs, PLUS all medical and pension benefits cost for retired employees, then DIVIDES by (The Denominator) current Total Work Hours for Current Workers to EQUAL his "average wage". This result is then used to carelessly imply that this is what autoworkers are actually paid ... a clearly confounded result. He easily leads us to the bogus meme: that all the Big Three Auto's problems are caused by the "higher wages" in Detroit versus their Japanese competitors.
"G.M. currently employs about 8,000 people who actually don’t come to work. Those who do go to work are paid about $10 to $20 an hour more than people who do the same job building cars in the United States for foreign makers like Toyota. At G.M., as of 2007, the average worker was paid about $70 an hour, including health care and pension costs."
All this little exercise in production math demonstrates to me is that Mr. Sorkin most likely missed the class on Introduction to Manufacturing Accounting and Economics during his Ivy League dayz at Cornell.
Fortunately, some folks with better math skills, a bit of skepticism for this media mob psychology, and some real sense of manufacturing accounting and economics, have weighed in on this little "bogosity":
Autoworkers Making $70 Hours - Not Really
Media Matters: The media myth: Detroit's $70-an-hour autoworker
Well summarized by Keith Olbermann's little spot-lighting in his "Worst Person in the World" send up:
In addition to our desire to see some "humbled Big 3 Auto CEO's" with a viable plan to salvage the industry, to be fair, there is also a reasonable expectation that Organized Labor will continue to be part of the solution for the future of US Automakers. If you look closely at the 2007 UAW contract, you will see that process had already begun. Seems some MSM journalists simply didn't do their homework.
Average Worker Wage Cut
Overall, contracts will cut the average wages of workers at all three companies, which are basically frozen at $28 per hour under the new agreement. As workers retire, the contracts require the companies to hire new workers, but the new employees will get an average of $16 per hour.
At GM and Chrysler, the new workers can transfer to assembly line jobs where they will get $28 per hour. However, those new hires won't get post-retirement health care and the defined benefit pension plans, perks older workers enjoy. At Ford, even new workers on the assembly line will get the lower wages and reduced benefits, McAlinden said.
As GM replaces older, more expensive workers with new employees, its overall labor costs will fall close to those of Toyota, said Greg Gardner, an analyst with Harbour Consulting in Troy, Mich.
Meanwhile, as the world's most profitable automaker, Toyota is certain to face intense pressure to raise wages, noted Bernd Swiecki, a CAR researcher who helped prepare the center's post-bargaining analysis of the new contracts.
Edmunds Auto Observer Nov. 18, 2007
$28/hour plus benefits does not equal $70/hour ...
This typical episode in creative journalistic math and subsequent repetition by major media talking heads, should give us all pause to do a little "double-checking of the math" on our own, before accepting trite answers (blame) for complex problems.
