I haven’t known what to make of conflicting claims about how much union auto workers are paid, so I was glad to see David Leonhardt’s explanation of what auto workers really make in yesterday’s New York Times. I keep seeing claims that they make $73/hour, and that just seems impossible.
In a nutshell, it is. Employees of the Big Three average $55/hour, while the (non-union) employees of Honda and Toyota average $45/hour, with the bulk of that difference a result of lesser benefits for the employees of the Japanese companies. But the Big Three has thousands of retirees, a result of being in business for generations, to whom they owe pensions, and that long tail is expensive for them. It’s only when including that cost in current employees’ pay—which has nothing to do with those employees, of course—that we arrive at the $73/hour figure.