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Home Publications Blogs Beat the Press Ford's Labor Costs Divided by Hours of Work Is NOT Their Hourly Compensation

Ford's Labor Costs Divided by Hours of Work Is NOT Their Hourly Compensation

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Thursday, 13 January 2011 16:22

The NYT told readers that Ford's labor cost for a worker is now $59 an hour, which is says is down 20 percent from what it used to be. It is important to recognize that this number is not what Ford is paying for current workers' pay and benefits. This includes all payments that Ford makes for labor, including contributions to its pension and health funds for workers who are already retired.

This is an important distinction. Unionized auto workers are paid more than the typical worker, but their pay is not as out of line as this figure implies.

Comments (7)Add Comment
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written by izzatzo, January 13, 2011 5:52
It's encouraging that unions and car companies have finally decided to determine wages based on the CEO Tiering Model, where the highest tiered workers earn over 400 times that of the lowest tiered workers.

Since this reflects true differences in productivity, it will guarantee survival in such a highly competitive market that doesn't depend on highway subsidies.
How about comapre their compensation to their misdeeds?
written by James, January 13, 2011 8:44

How much did former Countrywide chairman Mozillo or ML's Thain got? How about their perks in retirement?
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written by SS, January 13, 2011 8:54
The NY Times is getting worse and worse. Today's January 13 article on Sarkozy and Merkel is full of common misconceptions, prejudices, partial accuracies and is generally so misleading as to perversely allow one to understand why a foreign and economic policy based on such ignorance leads us so repeatedly and hopelessly awry.

To begin with Germany is not the frugal Teutonic bastion of financial virtue that anglo-saxon germanophiles would like to believe. German public debt to GDP is relatively high -- 19th from the number 1 worst Zimbabwe on a list of 129 countries and higher than many EU countries as the UK, Netherlands or even Spain and Ireland.

http://en.wikipedia.org/wiki/List_of_sovereign_states_by_public_debt

The famous debt problems in these latter are largely those of private debt not public, much of it financed by private loans from German banks. So where's the virtue in that? Secondly the article which like many uninformed Anglo-Saxon commentators makes Germany out to be the poor suffering financier of Europe's woes. Germany profits enormously from the EU. If only from the good weather in the South where without their vacations there Germans would suffer manic-depressively from their weather, the rest of Europe also provides them with a huge market, land opportunities to purchase choice southern real-estate with their export earnings, enhance international security and untold cultural and human resource emoluments.

Germany is no more likely to leave the EU then Texas to fight another independence war with Mexico after seceding from the U.S. Unfortunately we will stand by Texas like the rest of Europe will put up with German posturing.
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written by ComradeAnon, January 14, 2011 8:53
I wonder what the labor costs are for the NYT, the WSJ, G&S, etc?
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Rivers and Brooks of Print
written by KadeKo, January 17, 2011 5:31
ComradeAnon, please don't put it that way. That's the first step down the slippery slope of David Brooks writing two more columns a week.

Do we need that kind of productivity out of Bobo?
Canadian Auto worker
written by Blair M. Phillips, January 18, 2011 2:25
In 1983 when I was hired, the total cost of labour was 7 - 10% the total value of the car. Thats why GM has been the TOP 10 of the Forbes 100 and then 500 for such a very long time. Gross Revenue for 2010 is estimated to be in the area of over 350 billion dollars worldwide.
Today, labour costs are at 001% or less. Why have GM employees who are UAW members been negotiating "Concessonary Bargaining" since Bieber and the mid 1980's? The CAW & TCA National Office have been doing the same thing since 1990 - why?

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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