• Jul 13, 2007
UPDATE: Link to source finally added. Our bad.


A tip sent us to the blog of Dr. Mark J. Perry, professor of economics and finance at the University of Michigan, who points out that hourly union workers at the Big 3 make on average 57.6% more in a year than a university professor with a Ph.D. Using figures from the automakers themselves, Dr. Perry tells us that a union worker at Ford makes $141,020/year including wages and benefits. A worker at General Motors makes $146,520/year and one at Chrysler earns $151,720/year. According to another report he cites, the average annual salary for a college professor in 2006 was $92,973, which happens to be close to the $96,000/year a Honda, Nissan or Toyota worker makes in the U.S.

Why trot out all these numbers? It's clear that upcoming negotiations between the Big 3 and UAW will likely yield concessions in both wages and healthcare costs. They have to if the U.S. auto industry is to survive. Dr. Perry references those who say the concessions must be "transformational", and to illustrate what that means, he suggests that Union workers would have to accept a wage equal to that of a college professor with a Ph.D.

We get that union auto workers are overpaid, we really do. Dr. Perry, however, seems to imply that there's something inherently wrong with a Ph.D professor making less than a high-school educated auto worker. The wage of a union auto worker, however, should come down because it's artificially high, not because the social order of education dictates that those with Ph.Ds should earn more than those who only finished high school. But hey, maybe we're being too sensitive.

[Source: Carpe Diem]


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  • 73 Comments
      • 7 Years Ago
      The only thing this shows is that US Car companies are REALLY crappy negotiators.
        • 7 Years Ago
        LOL
        • 7 Years Ago
        You know, I don't really care what people make. If you can convince your employer to pay you more, then go for it. It's all about supply and demand. But when Toyota is paying their employees much less... and their employees seem more content.... there's obviously a culture difference there. I can speak from experience when I say that having a satisfying job is not all about making the very top dollar.
        • 7 Years Ago


        It proves the labor laws of the US are antiquated. The auto companies could refuse to accept the terms of service from any other supplier if they didn't like the price or quality. They would then go out and procure goods or services from a competing supplier. When it comes to labor, however, the auto companies can't do that. It's called bargaining "in bad faith." That's hardly a free market. The US's labor laws are antiquated and rickety and it's time for a change. Auto workers generate more than a supernormal return on their market value while financial capital devoted to the US auto industry hasn't generated a return above the cost of capital for decades and decades. The average person in this country makes about $39K and the average household makes about $48K, all-in. Relative to auto workers around the world and relative to all other wage-earners in the US economy, auto workers are obscenely overpaid. Yes, by the way, I have been in numerous plants and I've worked in a factory job. Auto work is not, in 85 out of 100 cases, strenuous work.
      • 7 Years Ago
      in my country for the same job (no unions here) the workers earn no more than $10000 for year. it's ridiculous.
      • 7 Years Ago
      There are lies, damn lies and statistics. Those are damn lies. That is the biggest crock or horsesh*t I have ever read. Look, without overtime, which is a reasonable statistic, the Big Three pay comparable to Toyota. That is about $50K per year without benefits. Do you want people to work for McDonald's wages? If so, you'll be next.

      Included in that statistic is retirement benefits, overhead for benefits, overhead for management and a whole lot of other manure. I've done FTE calculations for many companies and I know how they are done. Btw, the Big Three calculate benefits mounding on so much overhead it's laughable.

      The Big Three have a retirement healthcare issue but the average worker's pay, without OT is not that high. Some of these people are skilled tradesmen and women. Not everyone just screws together a part on the line.

      This is brainwashing by management. I know. I've spent my career in management.
      • 7 Years Ago
      Bill Gates didn't finish college. And there are a lot of contractors, salesmen and businessmen without degrees making a lot more than many doctors, lawyers and college professors.

      If you don't like your salary, go do something else to make more. Take some responsibility for yourself and quit telling me you're underpaid.
      • 7 Years Ago
      I won't dare get into the flame war that is sure to erupt over this article, but I wanted to point out who did this study, which will question its reliability.

      Perry does work for the Mackinaw Center for Public Policy in Michigan, a far-right think tank which opposes all things government, including the minimum wage, public schools and anything that's not privatized. They are really a libertarian organization, but not in any good way. They are the "drown the government in the bathtub" crowd. They take free enterprise to its extreme and think the market can fix all of society's ills.

      Just so you know the whole story…

      http://www.mackinac.org/bio.aspx?ID=173
      • 7 Years Ago
      just an ass load more people,
      making an ass load more then me,
      for doing less.
      • 7 Years Ago
      93k sounds low for wages + benefits for a professor. Sounds like he should be adding ~30% to include benefits. That would put him a ~121k a year.
        • 7 Years Ago
        I was thinking the same thing. The numbers for the big 2.5 were reported as wages plus bennies. The numbers for the Japanese automakers and college profs were only reported in the AB article as salaries. Something wrong here?
        • 7 Years Ago
        Agreed. Just sounds to me like a classic case of trying to twist the numbers to support whatever position you happen to be defending.

        Don't get me wrong, I think UAW line workers are overpaid, but he is probably doing more harm than good to the Big 3's case for wage/bennie reductions by twisting the numbers in such an obvious way -- turns people off and makes them less sympathetic to the cause. At least, it turns off those people that don't like it when people try to manipulate them and their feelings so blatantly...
        • 7 Years Ago
        Jason: 93K sounds low, huh? did you even read the article or was the colorful picture good enough for you?

        "According to AAUP and IES, the average annual compensation for a college professor in 2006 was $92,973 (average salary nationally of $73,207 + 27% benefits)."

        I'll summarize: Benefits totaling almost 30% WERE calculated into the 93K professors make. There's no extra "hidden" conspiracy money that professors make.

        And to imhoff and jm99, someone is twisting the numbers: It's you.

      • 7 Years Ago
      I have 2 university degrees and for the past 3 years I've been working on the line @ Chrysler... not what I planned or wanted to do but they pay well...

      Don't know where this guy gets his numbers from but I worked a lot of overtime last year and did not miss any days and made just under $90,000, and I doubt benefits amount to over $60,000 per year???
        • 7 Years Ago
        Im 26 and I went to the local college here but dropped out when i was 19 and went to work for Ford in 1999 at the height of the SUV boom. Last year was my highest year and I only made 107,000. I did some overtime as well. I dont know how much my benefits cost, maybe another 20k but I am still only at 127,000. The numbers are wrong, we dont make that much.
      • 7 Years Ago
      This seems a little fishy. I have a recently retired engineer from the big 3 in the family, and he was prettymuch as close to executive level as you can get while still being an engineer, and he didn't make near what they're listing for an average hourly worker. Including all the benefits I still can't see it being more than what Forbes is calling Average. I would like to know more about how Forbes comes up with these average per hour costs...Living in the Detroit area, I don't see workers buying up the houses in the expensive neighborhoods for the most part, it's the high level engineers and the management/executive people, so this just seems...weird to me.
        • 7 Years Ago
        Why should a high school educated worker make more than a college professor or a high school teacher? There is absolutely NO reason for it. Its really unfortunate that the pay scale is not set by "importance" or liability. In a way it is - thats why higher educated health care workers are compensated more than say techs. If I screw up at work its an automatic lawsuit. If a UAW worker isn't "perfect" so what - my frikin' new Toyota's rattles attest to that. We should demand the specific worker that didn't torque my shock tower nut to spec be fired or sued for incompetence. Unions are bad for the economy and bad for business and I think they should be abolished. I really feel sorry the auto industry has to deal with them.
      • 7 Years Ago
      Apparently, some of us didn't go to UC Boulder. If you did, you'd know it doesn't take smarts to become a college professor.
      • 7 Years Ago
      Does anyone actually click through (or has anyone here even attended university)? The University salary included benefits. Salary was only 73K for the profs, the rest was benefits. So these are comparable amounts.

      It is well know that University profs have always made less at schools than in industry. 5 years after I graduated I was making more than my tenured profs.

      Plus they don't work 15hours a week and get summers off. They work year round at the University I went to. They all have summer sessions these days. Also a big part of being a University professor is doing and directing research. Many work more than 40hrs/week and they don't get overtime AFAIK.

      HotRodzNKustoms
      • 7 Years Ago
      I think we found the Big 3's problem. lol With the Big 3 workers being payed more than 50% more than the Japanese workers. No wonder the Big 3 are having trouble competing.
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