In the past it’s been noted that the US auto industry pays extraordinarily high hourly wages to it’s union employees for what what amounts to semi-skilled production line work. With the auto industry in the US seemingly collapsing at this point are these super high wages still being paid?
I think they still are paid very well , but a lot of those jobs no longer exist.
Whether US auto workers are paid appropriately or not is a purely political issue. Many, many people consider their wages quite fair.
All the studies I have seen comparing the costs of US and Japanese automakers show that the actual making of a car is comparable. The big difference is the US companies have a much larger overhead. Lots of management with large salaries, far more advertising staff, etc.
Pensions too. Don’t forget that.
They also have health insurance that is better than the majority of people in the US and they pay little or nothing for that coverage.
Historic highs for UAW GM workers have been in the range of 35-40 dollars/hr plus about 25-30 dollars in benefits–a total of $70-$75/hr or so.
If you are a veteran autoworker and haven’t taken early retirement or had your job eliminated, you’ll get paid per contract until the company goes belly up and there aren’t any more jobs there, or until you renegotiate the contract…
As to whether or not the work is “semi-skilled” that’s a matter of opinion. There have been claims that union definitions are so broad that even a grass-mower gets paid disproportionately high wages. I am unaware how much of that is hype and how much is true.
From an article in CNN Money (Feb '08)
http://money.cnn.com/2008/02/12/news/companies/gm/
"GM has sought various ways to replace higher compensated employees with ones paid closer to 60% of that…if you still have a job and you have been around awhile, your compensation hasn’t been reduced. The current veteran UAW member at GM today has an average base wage of $28.12 an hour, but the cost of benefits, including pension and future retiree health care costs, nearly triples the cost to GM to $78.21, according to the Center for Automotive Research.
By comparison, new hires will be paid between $14 and $16.23 an hour. And even as they start to accumulate raises tied to seniority, the far less lucrative benefit package will limit GM’s cost for those employees to $25.65 an hour."
I work – salaried – for a US auto manufacturer, and spend a significant amount of time in many body assembly and stamping assembly facilities. My particular position often has me working directly with unskilled and skilled trades. Prior to my current position, I was a direct supervisor for a group of quasi-skilled trades.
Given that…
[ul]
[li]When I was made supervisor instead of just an engineer on the previous position, I received a pay raise so that I wouldn’t be making less than the people I was supervising.[/li][li]We’re full of inefficiencies required by the union contracts. Examples:[/li][list]
[li]To make a simple repair, we’ll often need a pipefitter, electrician, and machine repairman, because each respectively is only allowed to touch a certain component of a machine.[/li][li]Everyone is “equal,” and so when a hot job that requires a smart, motivated electrician (for example), you’re apt to end up with the guy that hasn’t learned anything in the last 30 years.[/li][li]Overtime is equalized, so we’re always planning around who’s up for the work on the weekends. If we want the “good” guy, we’ll sometimes schedule unnecessary overtime just to make sure he’s in on the weekend.[/li][/ul]
[li]Yes, there are huge legacy costs, such as insurance and pensions.[/li][li]Yes, the auto manufacturers allowed these contracts back in the day when “everyone did it” and there was no foreign manufacturing competition. But take-backs are hard.[/li][li]Skilled labor:[/li][ul]
[li]Most of these guys are truly skilled and state licensed. That doesn’t always mean they’re up on the latest technology, though.[/li][li]Some things are just mind numbing. Why are electricians the guys that are expected to program robots? (The motivated guys can get good at it, but there’s no separate classification for motivated guys.)[/li][li]We’re usually prohibited from using job shops (even union ones), so we always, always have either too many or too few skilled trades. For example, we’d only need a few during the week during production, but a couple of dozen on the weekends during premium time. No way to balance that out.[/li][/ul]
[li]Unskilled (all the below applies to the skilled guys, too):[/li][ul]
[li]These are highly compensated people, even without overtime. Honestly, they’re all in the higher half of the middle class.[/li][li]Because of the compensation, they’re not 100% dumb people. A lot of these people have degrees, and just accepted the stability of the work and income. One guy I know at my previous position had been a lawyer in a practice.[/li][li]Because of the compensation, lots of these guys also have their own side businesses that make pretty good money.[/li][li]Most of the work really, truly is unskilled. That doesn’t mean a monkey can be trained, because they still have to have common sense about when something isn’t right.[/li][li]The assembly work is repetitive and boring. We make huge efforts to enhance ergonomics, and so it’s not as physically exhausting as it used to be, but the repetition and boredom tires the minds of the brighter ones. I wouldn’t want to do it for 40 years.[/li][li]Janitors and groundskeepers fall into this category.[/li][/ul]
[li]Quasi-skilled:[/li][ul]
[li]These are usually unskilled workers that bid into higher-paid, premium jobs. They may be weld inspectors, sheet metal finishers, and other non-production jobs.[/li][/ul]
[li]Insurance: the hourly folk have virtually free insurance. They pay a token sum now, I believe. One of the motivated guys that I brought to the salaried rolls went back to hourly just because of the insurance![/li][/list]
Thanks, Balthisar. That was very informative.