Will Bunch on the stakes of the auto strike:
"What Fain and the UAW are proposing isn’t just a nice little bump in next week’s paycheck, but a return to the day when a person from the assembly line could afford a fishing cottage — or to send their kid to college," writes @Will_Bunch.https://t.co/0KsHimntd1
— The Philadelphia Inquirer (@PhillyInquirer) October 8, 2023
For what it's worth, here's the approximate¹ pay scale for UAW workers over the past 80 years:
Workers have lost a considerable amount over the past two decades. However, if you're comparing current wages to the good old days of, say, the mid-60s, they're paid far more. They can afford more today than they could back in the heyday of Walter Reuther and the era of good feelings.
¹It's approximate because the pay scale depends on years of service. Some sources provide an average pay rate while others report the top wage rate. Currently, the main pay tier is reserved for workers hired before 2007, all of whom qualify for top pay, so the average is about the same as the max. For the years in between I've adjusted top pay rates slightly to get closer to the average.
Yeah, but it seems like everyone fantasizes the past. "It only cost X for a house and Y for a college degree!" Like things should cost exactly the same now.
I find it ceaselessly amazing the chorus of how terrible things are - from every side.
Meanwhile TFG is claiming Hannibal Lechter [sp] as a supporter. Imagine if Biden had done that. Dems would be calling for him to resign.
They're the same people who demonstrate they don't know what 'vintage' mean when they insist their realtor show them 'vintage houses'.
Yes. They should. Or be cheaper. This is so.
Hourly wages are incomplete picture of both earnings power and total compensation. Does not include benefits, healthcare, or pensions, which are all likely to be significantly reduced in the last 20-30 years.
While adjusted for inflation, the world is much different that in the 1960's, 70's and 80's, in terms of what type of life style those wages could buy.
+1 I was going to say much the same.
As I understand it, pensions are much reduced for most workers, but health care premiums (that the companies pay for you) have gone up and up and up, outpacing inflation by a lot.
**tangential rant alert**
The Healthcare Industrial Complex is stealing our money. Not really joking. Many doctors (in most specialties, it’s most doctors) make $300-500K and RN’s make $100K+ and their giant gleaming facilities take $20,000 a night, not counting the bills from the pathologists and radiologists and anesthetists and any charges not pre-authorized or any charges deemed not medically necessary or any charges with a TOS/POS mismatch or the wrong diagnosis for a given procedure, or any worthless doctor who wanders into your room and gives an opinion that is less informative than 2 minutes on Google, and bills you and isn’t a covered provider…
And then the Insurance Companies (BCBS, United) take their (20%) cut.
I’m not sure but I think it’s a racket.
FTFY
RNs make on average 81,000. And that's being underpaid for the work they do.
[RN’s are] “underpaid for the work they do.”
Overall, I agree with your point. Apologies for the fact-free flight I took there. Was thinking of CA where >$120K is the RN average reported often (but other sources give different, lower numbers). I was also thinking of travel/agency nurses during the last few years, making double that - in some specialties with (extensive) additional training/certification, 3 or 4X that. (NPs doing anesthesiology at the high end of that range).
But it is physically, probably emotionally, taxing job. The rate of turnover suggests it is underpaid and undervalued compared to others. On your feet all day, dealing with sickness, often difficult patients and doctors. I couldn’t do it.
I also know many very well-paid people in finance and tech - I don’t know how to judge what someone’s correct value should be.
If the US ever goes to a more socialized health system, if money is to be saved, *someone* will have to take a haircut. But you’re right, RN pay needn’t be on that list.
While adjusted for inflation, the world is much different that in the 1960's, 70's and 80's, in terms of what type of life style those wages could buy.
No. That's not the case. Adjusting for inflation means just what it implies: the material standard of living that could be bought then (vs. now).
You see this kind of misconception on Twitter: there's a meme going around showing a happy (white) family from 60 years ago. Very Ward and June Cleave-like. Smiles all around, and a clearly enviable standard of living (nice house, well-dressed, shiny car in the driveway, etc). And the caption bemoans how in those days one could afford this on a single salary, and nowadays people struggle to get this with two salaries combined.
But the reality is in those days more Americans were living like Ralph Kramden than the Cleavers.
I don't disagree the charts fail to fully take in account housing costs in our 8 or 9 most expensive markets. But plenty of people in those cities have benefited from the runup in house prices (eg, the Kevin Drum household). And folks in Kansas City and Charlotte and Grand Rapids and Memphis (you know, 80% of the country) haven't been adversely affected by the fact that a 3 bedroom ranch house in the Bay Area costs $2 million.
America tolerates too much poverty, that's true, but at the median, the material standard of living in the US is absurdly high, and per capita GDP has pulled ahead of most of its wealthy trade partners to the tune of 20-30%.
Cool. Now tell me what productivity-per-autoworker was in the 1960s, what it is today, and if wages have kept pace for that or if the increased productivity has been creamed off the top by management.
Here is my standard diagram of wage growth compared with GDP/capita, which is one form of productivity.
https://www.skeptometrics.org/BLS_B8_Min_Pov.png
Obviously real wages of all manufacturing workers have been stagnant since around 1979. BLS does not have a separate category for auto workers. Auto workers have certainly done better, since many of them are unionized. But Kevin's diagram is deceptive, since it shows the pay for veteran workers, not the average. More auto workers are non-unionized now and probably more get the lower-tier wages. It is very unlikely that the average auto worker's wages have come close to keeping up with GDP/capita.
The CPI does not really measure a standard of living - the "basket" of stuff that is used has increased in capability and quality. So even if real wages have not increased people are doing better than in the 70's. But wage-earners would be doing much better if they were getting the share of productivity that they were getting up to the 70's. Inequality has continued to increase. The UAW is a leading union which can set the goal for workers in other unions, and it can stimulate non-union workers to unionize.
One thing that needs to be kept in mind is that the auto industry has been protected from foreign competition. Companies have been bailed out and there have been tariffs and other restrictions on foreign vehicles. If corporations can resort to cheap foreign labor at will there may be no more unions anywhere in the US.
Have (auto) workers of the world not united? Does the UAW organize overseas?
"Cool. Now tell me what productivity-per-autoworker was in the 1960s, what it is today, and if wages have kept pace for that or if the increased productivity has been creamed off the top by management."
Why would you expect increased productivity to lead to higher wages rather than lower prices? The jobs aren't any more skilled than before. In fact increased productivity leads to less demand for labor (as fewer workers are needed) and our immigration policies mean an ample supply of labor so it is no surprise that wages are stagnant.
I don't. But your scenario is a counterfactual: The reality is lower wages and higher prices. Is this scenario -- the one in actuality, not might-have-been -- something you expected? Why or why not?
"...But your scenario is a counterfactual: The reality is lower wages and higher prices. ..."
Adjusted for inflation and quality car prices have decreased. See here.
"CR’s analysis found that from 2003 through 2021, the price of new vehicles did not increase once we adjusted for inflation. That’s despite some big improvements: Average fuel economy improved 30 percent, saving consumers an average of $7,000 in lifetime gas costs per car."
How about adjuesting for just inflation. Or are you claiming that air bags and backup cameras were options back then? Please make like comparisons, otherwise data is just so much GIGO.
"How about adjuesting for just inflation ...."
That's what CR did. The quote says you are getting a substantially better car for the same price. So if you were adjusting for quality too you would be seeing a price drop.
However if you prefer you can say the increased productivity led to higher quality rather than to lower prices. In any case there is no reason to expect the gains from increased productivity to go to a worker whose job hasn't gotten any harder.
That was not what I was saying but I have no problem with saying this one's on me; I plead my first cup of coffee. Let me think of the right way to express what I want to say before I make another mistake.
You could expect wages to keep up with productivity because that is what happened in US history up to the 1970's. Here are data from 1939 from the BLS (GDP/capita is a measure of productivity):
https://www.skeptometrics.org/BLS_B8_Min_Pov.png
And data going back to 1774:
https://www.skeptometrics.org/WageIndex.png
using a wage index from the Economics History Association:
https://eh.net/database/unskilled-wage-index-u-s/
Something drastic happened to wage growth about 50 years ago. Probable factors: sharp turn to right in US politics; international competition; increased immigration (it was low in the 20th century up to about 1970).
And Big Three CEO pay over the same time period? Adjusted for inflation, of course.
Yes, CEO pay. Something which makes for great sound-bite, and sought vengeance, but wouldn't provide much sustenance. For example, in 2022, the GM CEO is reported to have had a compensation of not quite $29 million dollars. So, say that $28 million of that were taken away and given to the GM employees. In 2022 there were something like 167,000 people working at GM. 28,000,000 / 167,000 is 167.66 So they would see another $167.66 each year. Not sure how many hours are stipulated in the current UAW contract, but take the typical 40 hours a week, 50 weeks a year, and that would be a 0.25% (one quarter of one percent) increase in gross annual take-home pay for the top tier.
As a large number, CEO pay makes for appealing symbolism, but a large number divided by another large number (number of employees) ends-up being a not-so-large number.
CEO salary may just be the tip of the iceberg. What if all the C-Suite salaries are similarly large due to the same stock options? What about the level of managers below that? If their wage growth is shooting up while the union workers is stagnant for 20 years, that .25% may be much bigger.
I was working in the sixties. I had factory jobs related to the auto industry, and was in two unions. Wages seemed high, but so were prices. If you worked in a factory, then you were pretty much assured to be able to buy a house, have one or two cars, and support a non-working wife and three kids.
This was possible because the house had no insulation, no air conditioning, and encompassed a big 1200 square feet. The car was a death trap in a collision because seat belts were an option, and had an engine which required constant maintenance and lasted 80,000 miles if you were lucky. The food we ate was basic in the extreme. Televisions were black and white, there were three channels, and you didn't own your phone.
If people were willing to live like that today, then that same family could probably survive on the wages of a single factory worker. But you know, worker productivity goes up every year, and most workers would like to see some of that productivity go into their pockets. They'd like to live better.
+1
And a cancer diagnosis was usually a death sentence. Now the majority of Americans survive (five year survival is above 2/3rds). Medical advancements are a huge improvement.
All good points. Some consumer goods, like the TV, clothes, and cars are relatively cheaper thanks to technology and foreign imports, but housing, healthcare, and education are all much more expensive than they were for the Boomer generation (like you said, in part because it's also much higher quality). Unfortunately, those are also the things that matter most for upward mobility, so if you're priced out of them, yeah, you feel like you're losing ground even if you can still afford an 80-inch flatscreen.
My dad was a self-employed mechanic during the sixties and as he told me later, and least half his revenue stream came from rebalancing tires, oil and tra.nsmission fluid changeg, etc. Don't forget that no sensors, manual transmissions (my dad used to go on about the hydromatic) meant much more 'pilot error' due to innatention, so to speak; there were a lot of drivers who clashed gears acrooss, inspert the brakes until the drums had to be returned and so on and so forth. The people who can't drive a stick don't know how good they've got it.
Car dealership owners are absolutely shitting themselves at the prospect of an all-electric vehicle fleet in the future. One, Tesla's no-dealership sales model is terrifying and they know other automakers are eyeing it with intense interest. There are still laws in other states prohibiting direct-to-consumer car sales, but that will certainly change. Plus, where most dealers make their money is not selling cars, but maintaining/repairing them. Electric vehicles get maintained with software updates. Sure, there are still things like tires, brakes, etc, but nothing like with ICE vehicles.
This is why you're seeing GOP candidates at both the state and national level going to these car dealer conventions and promising to stop electrification.
Similarly, I’m not sure a bare-bones “fishing cottage” exists anymore. Does it? I’m not from that milieu, is he talking about a shed you carry out onto the lake to cover your ice fishing hole?
I used to fantasize about a “cabin in the woods,” but I’m not sure they exist either - they’re probably a five hour drive through depressing landscapes, or they’re perfectly twee and cost $2M USD.
Do a search for "northern Michigan cottages for sale" That should let you see what these guys buy, after the second SUV and the boat.
And yes, the places are a few hours drive away from Detroit. The roads are full of northbound vehicles on Friday, and Southbound vehicles on Sunday, but the scenery is really not depressing. Quite the contrary.
"However, if you're comparing current wages to the good old days of, say, the mid-60s, they're paid far more."
As a reminder, in the 1960's the US auto market was not really global: the Big Three competed with each other. Today competition is global, and non union domestic (Tesla and southern factories for European and Japanese automakers).
My point, the cost structure of the UAW must be globally cost competitive.
So you're claiming the Big Three's profit margins shrank over the intervening decades.
ScentOfViolets - I am claiming that in, say, the 1960's Ford's cost structure had to be competitive JUST with GM and Chrysler. Today Ford's cost structure must be competitive with perhaps 2 dozen car companies, many of which don't use union labor.
It's probably useful to point out that the number of UAW workers is way down from 1.5 million in 1980 to about 400,000 now. There are currently more living retired members than active members.
Look at the wage chart and pay attention to the red line over at the right and down. How many people hired since about 2005 are at THAT pay scale. Doubt any of them are "living large" at all compared to the people at that upper line. And even those at the upper line are not actually all that flush.
My wife and I are retired. Thanks to some good jobs in high tech and fortunate investments, our hourly income (based on 2000 hours a year) is well over $120 per hour.
That is the point. Healthcare has gone up in price. It also has become far more effective for many conditions.
This is silly. Yes, the workers could afford less in the "good old days" compared to nowadays. However, their bosses also could afford less. What matters is how the pay compares between workers and bosses back then and now. And this comparison is frankly shocking. To get back to the equilibrium of the the 1950 workers would need several 100% increases.
What matters is how the pay compares between workers and bosses back then and now.
Not to most people. If they're doing better in absolute terms, they're not troubled if Bezos or Cook are doing even better still.
It's when the former is not the case—when workers are affected by wage cuts, inadequate pay, stagnating living standards, economic insecurity, etc—that complaints about CEO excess resonate.
For the record I personally think economic inequality is a serious problem, which is why I want the safety net strenghthened and the tax code made as progressive as possible. But I don't think the average American worker is bothered by gigantic CEO salaries as long as their own material standard of living is rising.
Even if the Mercers, the Kochs, the De Voses, Et al. use their fortunes to polically cut their their wages, protections, and pensions?
I think the psychology of this is how are their neighbors and peers doing. We are happy as long as we are doing as well and have the income related perceived status of our neighbors. Because we are isolated from CEOs where we can't see what vast wealth and ease they have accumulated then, yes, we can be happy with our scraps.
I've heard that the biggest thing the Union is asking for is that electric vehicle manufacturing include union workers. I have no idea how that will shake out.
Kevin please add a line of real auto manufacturer CEO pay over the same period. Let us see how the wealth has been shared.
AI produced Chevy truck ad,
https://www.youtube.com/watch?v=MI7Tq6sRxE4