Thursday, March 12, 2009

Compensation structures

The media keeps repeating the automobile industry's convoluted hourly compensation claims (ie the average hourly compensation for a worker is $60 an hour). Dean Baker notes:

It would be helpful if the NYT and other media outlets would revert to normal English usage in discussing the compensation of auto workers. Ford is welcome to keep their books anyway they like, but payments that do not go in any form to current workers, like the cost of retiree health benefits, do not fit the definition of compensation. UAW auto workers are reasonably well-paid, but their compensation package is not as generous as this measure of "compensation" implies.
I actually like the creativity of this "pay Person X, but label Person Y as recipient" approach. I am waiting for executive compensation to be rolled into the worker's numbers so that the media will report that some metal stamper is earning $300/hour.

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