As pointed out by Inky99 here and here, the popular right-wing meme that UAW workers make $70-plus per hour is nonsense. It's a carefully-constructed lie based on the kind of "fuzzy math" that George Bush once disingenuously decried.
But I believe I've stumbled across an additional reason why $70/hour is bull. For details, see after the jump...
So: I have a Republican friend who routinely repeats to me the talking points he gets from right-wing listserves, websites and pundits. When he started claiming that Big Three auto workers make $75/hour, I decided to start digging. I began with this friend's citation of a Heritage Foundation "chart" on the topic. This bogus chart pegs UAW Chrysler worker compensation for health benefits alone at more than $20/hour:
That $20 is folded into the right's "$75 per hour" claims. It implies a health plan which costs Chrysler somewhere between $25-$40,000/year, depending on how many hours per year you use. That raised a red flag for me... I know U.S. health care can get expensive, but does anyone here of non-retirement age have a health plan whose premiums cost anything like $40K?
Suspecting some self-serving sleight-of-hand from Chrysler in these figures, I then looked into how they come up with this staggering number.
ANSWER: In tiny footnotes to its report, Chrysler mentions without explanation that it is using something called a "FAS 106" number for health care costs.
OK, so what's FAS 106? It's a special accounting method which doesn't in fact represent the actual cost of premiums the company pays for its workers. Rather, it appears to represent a company estimate of the potential value of the health care benefits which an average worker might potentially receive if their insurance provider actually had to pay for a major illness, hospitalization, etc. (FAS 106 accounting also is usually used for retirement benefit estimates, not for 45-year-old active workers, the which the Chrysler report uses as its "typical" worker.) Here is a link to an AARP explanation of FAS 106 accounting:
But the company pays premiums to insurers, not the full cost of every worst-case-scenario illness... That's the whole point of health care insurance, right? Plus, most workers do not get seriously ill in a given year, and so the actual "compensation" is far lower than Heritage/Chrysler want us to think.
Moreover, it turns out the $75/hour figure refers to a workweek of 32.5 hours. But when people hear that $75 figure, they almost surely project its value out based on a 40-hour week instead. So it again sounds higher than it really is.
And then there is the completely unspecified "all other compensation" which Heritage makes no effort to explain, though it makes up another major chunk of that supposed $75/hour figure.
In short, the $70-$75 numbers iare grossly inflated by any normal measure of compensation. Using fudged and projected values, rather than the company's actual contribution to the average worker's health care plan, only serves the purpose of making Chrysler's workers sound more pampered than they are.
And indeed, the document relied upon by the Heritage Foundation turns out to be none other than a Chrysler media "briefing" paper put out to spin its side of negotiations with U.A.W. back in 2006. In short, company propaganda gets laundered as a think tank analysis, and then jumps into the mainstream via Fox, Limbaugh, Kristol columns, etc.
Meanwhile, as Inky has pointed out, the figure is even more distorted than described above, since the $20/hr. figure includes long-term benefits to other, retired workers. So the $70-$75 per hour meme is triply a lie.
But if you repeat a lie often enough, it becomes common "knowledge."