How Much Are GM's Labor Costs?

Felix Salmon says it’s not 70$ an hour per worker. 

The average GM assembly-line worker makes about $28 per hour in wages, and I can assure you that GM is not paying $42 an hour in health insurance and pension plan contributions. Rather, the $70 per hour figure (or $73 an hour, or whatever) is a ridiculous number obtained by adding up GM’s total labor, health, and pension costs, and then dividing by the total number of hours worked. In other words, it includes all the healthcare and retirement costs of retired workers.

A number of Felix’s commentators argue that he’s missing the point. I don’t know whether he is or not. I put up the number because it came from thinkers I trust, and if I was wrong to do that, I’m happy to admit it. Anyway, it looks like we all agree that GM has extraordinary liabilities, even if some of them are being shifted onto the UAW, and that it continues to waste a ton of money that could be put to better use elsewhere.

Advertisements