December 07, 2008
TAX LAWYWER TRIES TO BAIL OUT UNIONS
In this post, the author, a tax professor, tries to scold the media (actually, just the NY Times - big surprise) and politicians for overstating the cost of labor in the Big Three automakers. He's constructing a straw man.
He (and others) observe that current production line workers don't actually make the $70 per hour. This is entirely irrelevant to the fact that the costs cited in those articles were fair comparisons, showing that other companies making cars in North America can do so profitably because they don't have to pay ridiculous union-driven overhead.
The Times writer he spikes uses a lazy formulation "...the average worker was paid..." rather than the more accurate "...the cost per worker in wages and benefits averages $70..." The prof asserts that his causes people to think that current unionized auto workers get paid $70 per hour, which unfairly enrages those who don't get paid that much, making it harder for us peons to support a bail-out of the Big Three.
What makes costs for the Detroit 3 so much higher are all the legacy pensions and benefits for the unionized retirees and job bank workers. This translates to a higher cost per car, which in some cases actually exceed the price they get. It is this business model we should not bail out, which he sort-of-kind-of says later in the post, using the ass-covering tactic known as the modified limited take-back.
I don't think anybody actually thought that individual autoworkers made $140,000 per year in wages and benefits. Anybody who did is a moron. All the articles I read that used these comparative figures never said that, which shows I'm smart not to read articles by the NY Times, but instead I to go straight to the original sources.
No matter how you slice it, Prof, we cannot bail out the Big Three in their current models. As I said before, individual product lines and brands are profitable, so let them emerge from bankruptcy free of the unjustly enriched unions.
Via Instapundit.
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He (and others) observe that current production line workers don't actually make the $70 per hour. This is entirely irrelevant to the fact that the costs cited in those articles were fair comparisons, showing that other companies making cars in North America can do so profitably because they don't have to pay ridiculous union-driven overhead.
The Times writer he spikes uses a lazy formulation "...the average worker was paid..." rather than the more accurate "...the cost per worker in wages and benefits averages $70..." The prof asserts that his causes people to think that current unionized auto workers get paid $70 per hour, which unfairly enrages those who don't get paid that much, making it harder for us peons to support a bail-out of the Big Three.
What makes costs for the Detroit 3 so much higher are all the legacy pensions and benefits for the unionized retirees and job bank workers. This translates to a higher cost per car, which in some cases actually exceed the price they get. It is this business model we should not bail out, which he sort-of-kind-of says later in the post, using the ass-covering tactic known as the modified limited take-back.
I don't think anybody actually thought that individual autoworkers made $140,000 per year in wages and benefits. Anybody who did is a moron. All the articles I read that used these comparative figures never said that, which shows I'm smart not to read articles by the NY Times, but instead I to go straight to the original sources.
No matter how you slice it, Prof, we cannot bail out the Big Three in their current models. As I said before, individual product lines and brands are profitable, so let them emerge from bankruptcy free of the unjustly enriched unions.
Via Instapundit.
Posted by: JBD at
12:18 PM
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