I caught some crap for linking to Mark Perry on GM's labor costs, and to Casey Mulligan's linking to Mark Perry on GM's labor costs. I said I wasn't sure whether or not they were making a mistake, because I wasn't sure.
Well, it looks like there's no mistake. Here what General Motors says, via Mark Perry:
Let me quote directly from General Motors Manufacturing and Human Resources website (click on “Other Benefits,” or go here directly):
The total of both cash compensation and benefits provided to GM hourly workers in 2006 amounted to approximately $73.26 per active hour worked. This total is made of two main components: cash compensation ($39.68) and benefit/government required programs ($33.58).
The average annual cash compensation for hourly employees in 2006 was $39.68 per hour. Included in average earnings are straight-time pay, Cost of Living Allowance (COLA), night-shift premiums, overtime premiums, holiday and vacation pay. In 2003, GM workers logged 41,363 (hours in 000's) in overtime hours for an average of 371 hours per worker; in 2004, 39,409 overtime hours for an average of 374 hours per worker; in 2005, 33,555 overtime hours for an average of 337 hours per worker; and in 2006, 27,265 overtime hours for an average of 315 hours per worker.
Benefit/government required programs in 2006 added an additional $33.58 for each active hour worked. These costs include: group life insurance, disability benefits, and Supplemental Unemployment Benefits (SUB), Job Security (JOBS), pensions, unemployment compensation, Social Security taxes, and hospital, surgical, prescription drug, dental, and vision care benefits.… Note that the $73.26 per hour was for 2006, and it's probably higher now, so if the $73.26 per hour labor cost was incorrect, it was probably too low, not too high.
Here are some links for additional sources for the $73.26 per hour cost for GM at Business Week and USA Today, both of which I assume do strict and careful fact-checking.
So, yes. Few workers are getting over $70 per hour in wages. Average cash wages in 2006 were just shy of $40 per hour. At least that's what GM says. The value of benefits per hour was north of $33 per hour. It adds up to average total compensation per active hour worked of over $73. At least that's what GM says. Maybe they're wrong and making some kind of fundamental mistake adding things up this way. If so, maybe all the people angrily linking here, or demanding a retraction and apology, should send a fax to Detroit or something.
I've just added Mark's blog to my feed reader. You should too. It's terrific.
Will Wilkinson 