How much is a Detroit autoworker really worth?
22nd November 2008
Megan McArdle puts on her economist’s hat and runs some numbers.
The real cost center is retiree health care, and as noted above, this is negotiated as part of the labor contract for the current workers. Due, I’m told, to the UAW’s slightly strange constitution, retirees have more voting power than current workers. That’s why GM’s medical costs rose at such a staggering rate; they were sacred to the real power in the union.