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Mediamatters.Org -
It's been one week since New
York Times financial columnist Andrew Ross Sorkin wrote
that at General Motors, "the
average worker was paid about $70 an hour, including health care and pension
costs."
The nugget was part of a column in which Sorkin argued that the government should
not bail out the ailing
Big Three automakers and that they instead
should embrace bankruptcy.
Sorkin's point was that labor costs were out of control -- workers enjoyed
"gold-plated benefits" -- and that during bankruptcy, the auto companies could address those
runaway wages.
As I
mentioned, it's been one week since the column appeared, which seems like
plenty of time for Sorkin and the Times
to correct the misleading $70-an-hour claim. But to date, there's been no
clarification from the newspaper of record or from Sorkin himself.
And he isn't alone. Appearing on NPR last week, Times senior business correspondent Micheline Maynard told
listeners that the "hourly wage" of Detroit's
union autoworkers had
been driven up "towards $80 an hour."
Somebody at the Times
needs to clarify the record,
because the average United Auto Workers
member is not paid $80 an hour. Or even $70. Not even close. Yet
(thanks to the Times?) the issue
has become a central talking point in the unfolding national debate about the
future of America's
automotive industry.
Indeed, that $70-an-hour meme, actively promoted
by the anti-union conservative media, has ricocheted around
the traditional press as well as the political landscape, where it was picked up by congressional critics last week during
hearings and used to argue against aiding GM, Ford, and Chrysler.
For the record, I'm
not from Michigan, and I don't have friends or
family members who work in the auto or auto-supply business. And honestly, I think there are compelling
arguments on both sides of the question about whether to bail out the U.S.
auto industry. So I'm genuinely torn on the issue. But what's obvious to me is
that it's harmful to public discourse when the press, on such a central issue
facing our country, fails to clearly state the facts and instead perpetuates
misinformation with sloppy reporting
-- reporting
that seems to hold blue-collar
workers to a different standard
than their white-collar
counterparts.
Last week,
Senate Majority Leader Harry Reid (D-NV) announced
that automotive executives should
return to Washington
in coming weeks to "make their
case, to the Congress and the American people," for a federal bailout. And as
Times columnist and Nobel Prize
winner for economics Paul Krugman wrote
recently, "[M]aybe letting the auto companies
die is the right decision, even though an auto industry collapse would be a
huge blow to an already slumping economy. But it's a decision that should be taken carefully" [emphasis added].
But having the media echo conservative misinformation and
bandy about urban-myth
salary figures about allegedly high-on-the-hog
GM workers does not constitute a careful review of the facts.
Question: Is the press just being sloppy on this issue of
supposedly pampered autoworkers, or are there other elements in play? Because
honestly, I've had trouble escaping the not-very-subtle
elitist, get-a-load-of-this tone that
has run through the media's
misinformation on the
topic; i.e.,
"These autoworkers get
paid that?!"
Answer: No,
they don't, so please stop reporting it. (And why has the press been so
reticent to note that Big Three autoworkers recently made significant concessions to management?)
And it's funny, because I don't remember hearing much
coverage in the press about AIG workers' six- and
seven-figure salaries when the U.S.
government announced it was bailing out the insurance giant. And I haven't seen
or heard a single press reference to the annual salaries pocketed by Citigroup employees, even though
the government has moved in quickly to bail the banking giant out of a hole its
executives dug.
As Rep. Barney Frank (D-MA) pointed out
during congressional
hearings last week, "There is apparently a cultural condition that's more ready
to accept aid to a white-collar industry than the blue-collar industry, and
that has to be confronted."
That cultural condition seems to extend to, and be embraced by, today's white-collar press corps.
Make no mistake:
The $70-an-hour claim represents a
classic case of conservative misinformation. It's also a very dangerous one.
The falsehood about autoworkers is being spread
at a crucial time, when
a make-or-break public debate is taking place, a debate that could affect millions of
American workers.
"Lavish contracts granted to the United
Auto Workers, for instance, put GM on the hook for more than $70 an hour per
worker." [New
York Post]
"The United Auto
Workers are keen on saving their jobs and the $70-an-hour paychecks that go with
them." [National Review]
"[T]here's
no reason that a UAW
worker should get total compensation of $70
an hour when the average American only makes about $25 an hour in total
compensation." [James Gattuso, from the conservative Heritage
Foundation, appearing on MSNBC]
"Given that we're in tough economic times, it's hard for the
average American to muster a lot of sympathy for workers at the Big 3
automakers when all of the companies pay out over $70 per hour in wages,
pension and health care benefits." [Right Wing News]
"The bailout as proposed today is a bailout of the UAW;
it's not the auto industry. A Big Three worker in Detroit
makes $73 an hour if you include all the benefits." [Conservative columnist Charles Krauthammer, appearing on the syndicated television show Inside
Washington]
"Companies at which union workers make $71
an hour in wages and benefits -- compared to just $47 an hour at Toyota's U.S.
plants -- are not going to be saved by a $25 billion government check." [Former House Speaker Newt
Gingrich, writing
at Human Events Online]
"Big Three union workers, with their
gold-plated health care plans, make about $73 an hour in total compensation." [Conservative columnist Amanda
Carpenter at
Townhall.com]
"When you're
paying $73.73 an hour to those people with salary and benefits and your
competition is paying $48 to its workers, you're going to get your butt kicked
in the marketplace unfortunately." [Conservative radio host Lars
Larson]
"The average Detroit
autoworker makes more than $100K each year." [On-screen Fox News graphic]
Let's note that any suggestion in the press that most UAW
workers earn, or are paid, $70 an hour is spectacularly dishonest. Period. (As
one Daily Kos diarist pointed out
last week, according to the UAW website, the base
pay for a worker in a UAW plant is about
$28 an
hour.)
What that $70 figure (or $73) actually represents is what it
costs GM in total labor
expenses, on an hourly
basis, to manufacture autos.
Do you see that there's a big distinction? General Motors
doles out $70 an hour in overall labor costs
to manufacture cars. But individual employees don't get paid $70 an hour to make cars. (The
discrepancy between costs and wages is explained by additional benefits,
pension fees, and
health-care costs GM
pays out to current and retired employees.)
Simply put, GM's labor costs are not
synonymous with hourly wages
earned by UAW employees. Many in the press have casually used the two
interchangeably. But they're not.
Felix Salmon at Portfolio
did perhaps the best job
explaining the misinformation at play:
The
average GM assembly-line worker makes about $28 per hour in wages, and I can
assure you that GM is not paying $42 an hour in health insurance and pension
plan contributions. Rather, the $70 per hour figure (or $73 an hour, or
whatever) is a ridiculous number obtained by adding up GM's total labor,
health, and pension costs, and then dividing by the total number of hours
worked. In other words, it includes all the healthcare and retirement costs of retired
workers. [emphasis in original]
Indeed, according to this Associated Press report, a
chunk of GM's $70-an-hour labor costs goes toward
paying current retirees'
pensions and
health-care coverage. In other words, that's money that's not
going to end up in the pocket of any autoworker when he cashes his paycheck
this week. That's money GM has to set aside in order to pay off costs
associated with workers already in
retirement. That money has absolutely nothing to do with calculating
the hourly wage of a full-time UAW employee today. None.
So,
no, UAW workers don't make $70 an hour even if you factor in benefits, because a portion of those
benefits are going to people who retired years ago.
Nonetheless, that formulation (wages+benefits=$70 an hour)
has been widespread. That's what Sorkin did in his Times column: "The average worker was paid about $70 an
hour, including health care and pension costs."
Not only is that inaccurate, but there's also a problem in
terms of perception. It's true that autoworkers don't earn annual salaries and
that when calculating hourly wages, the cost of benefits paid directly to the
worker can be included. But some media outlets have been so casual and sloppy
in presenting the facts that news consumers are left with the false impression
that GM workers pocket $70 an hour. That's not true, and it seems some in the press are doing
very little to correct that misperception.
For instance, BusinessWeek
also used the same
convoluted language: "Older UAW members make more than $70
per hour in combined wages and benefits." Dallas Morning News columnist Cheryl Hall did it,
too: "GM's average worker makes $78.21 an hour in wages and
benefits."
Why does the press use that convoluted equation when calculating
how much autoworkers supposedly make?
I have a hunch it's because that $70 an hour is a real
eyepopper. It makes a very deep impression within the space of just a few
words.
I'm sure everybody understood
the $70-an-hour implication in Sorkin's
column, especially since he also lamented the "gold-plated benefits" UAW
workers enjoyed. (They were "off the charts," he stressed.) And since it's
harder to back up a claim of gold-plated benefits by citing the actual hourly wage of UAW workers ($28), Sorkin went with the $70
figure, along with completely nebulous language about "health care and pension
costs."
The takeaway from Sorkin's column was quite clear: GM is
mismanaged, and its
workers are wildly overpaid.
By the way, here's the right way to cover the issue: In a
November 18 column,
the St. Louis
Post-Dispatch's David Nicklaus wrote that the Big Three "need
to bring their labor costs, which average $72 an hour, closer to the Honda or Toyota level of
about $45." Note how
Nicklaus never implied that labors costs equaled take-home wages. Why? Because they don't. (And kudos to Washington Post business columnist Steven
Pearlstein, who refuses
to use the $70-an-hour figure because it's so
misleading.)
How much money GM's workers make is certainly relevant when
discussing the unfolding automotive crisis. But the press should stop confusing
the issue, and tainting the perceptions of news consumers, by
casually suggesting that $70-an-hour labor costs represent
what UAW workers pocket every 60 minutes.
That's misleading and dishonest.
And that's why it's still not too late for Sorkin and the Times to correct the record.Media Matters - The media myth: Detroit's $70-an-hour autoworker {...} Published: November 25, 2008, 8:12 pm - Indexed: November 27, 2008, 10:46 am - Page Size: 24KB |