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Big Three labor costs compared to average manufacturing

Mark Perry at Carpe Diem has an interesting post on United Auto Workers compensation relative to similiar, though non UAW laborers. 

According to data from Chrysler, a UAW assembler earned $64,100 in monetary wages in 2006 (not including benefits), and a UAW electrician earned $74,800 in monetary wages. According to BLS data (available here from Economagic), the average manufacturing wage in mid-2006 was $16.78 per hour, meaning that the average manufacturing worker earned cash income $33,560 in 2006, or about half of a UAW worker.

Dr. Perry notes the disparity in wages is a testament to the UAW negotiators:

This is actually a tribute to the amazing success of the UAW - it was able to not just build a middle-class of autoworkers, it was actually able to elevate its members from the middle class into the upper-income class, even though most UAW workers had (have) only a high school degree.

These kinds of labor costs, though, are clearly unsustainable.  The Big Three automakers have a number of big problems; lousy judgment on management's part, poor strategies, huge legacy costs and a high cost to manufacture.  Six or seven years ago it was no big deal - the automakers were profitable, fat and happy.  But, obviously, times change and the union has indicated a willingness to negotiate around some of these labor and legacy cost issues.

I've written a number of posts on the Big Three problems and invariably get some comments critical of the union.  I'm sure there's plenty of reasonable criticism that can be levied at the union, but workers seeking the best deal (and a union's attempts to negotiate it) is as much a part of the free enterprise system as management's goal of maximizing return for shareholders.  It's the natural tension in the system. 

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Progressive Politics Examiner

Jay began writing politically themed commentary and founded his blog, Swimming Freestyle, in October 2007. Here he'll write about politics from a...

Comments

  • AntiUAW 3 years ago
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    We must disband the UAW, they have been feeding on the automakers for years,like a cancer, sucking the life blood from the industry. Disband the UAW before any type of bailout plan for the big 3.

    disbandtheuaw.com

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