"Neither gives a reliable figure for the future cost currently being incurred and it is not obvious which is better. "

David Friedman makes a good point about wages and the Big Three:

"The one problem I can see with estimating the labor cost per hour using current expenditures for both current and past workers is that the number of employees and their terms of employment change over time. If, as seems likely—I haven't checked—the number of employees is substantially less than it was in the past, then dividing current pension payments by the current number of workers gives too high an estimate for the per worker cost being incurred for pensions to current workers. On the other hand, if pension terms now are more generous than they were for many of the currently retired workers, that would bias the numbers the other way. Similarly for medical costs--if we assume they will be higher in the future than they are now, then using current costs paid underestimates future costs currently incurred.

All of those are details and none of them were mentioned in Eric Boehlert's column. At the simplest level, and assuming the companies aren't trying to include both pension costs incurred and pension costs paid, which would be double counting, he is wrong. What he regards as a blatant deception is a better estimate for the real cost per hour of employing auto workers than it would be if corrected in the way he wants it to be."

However, the point he is making applies to the total money that the company pays on wages and compensation. It might well be that those costs need to adjusted downward to save the company. It is also possible that Bankruptcy would do that.

On the other hand, it doesn't address the issue of each individual worker's compensation, since a reduction in total compensation could take many forms. I do not believe that the UAW workers are wealthy. That seemed to be the point of much of the criticism of the worker's wages. In other words, why have sympathy for such well off workers?The workers know that their company can go bankrupt, that they can be laid off, that they might have to accept lower compensation, that they might never receive their pension money, etc. Being a UAW member doesn't preclude hardship.

How you view the issues of wages in this situation depends on what you want to know or to show. If you want to show that worker's compensation is too high, then you can make that point by looking at total wages. If you want to know what workers earn, you can look at their current wages and benefits. That's all that they are sure that they are going to get. I can agree that wages might need to come down, but I do not believe that these auto workers are wealthy or greedy.

The argument that these workers are wealthy is, from a Burkean perspective, dangerous. This system exists because people accept that it is either fair or reformable. When enough people start believing differently, things could go very sideways. I don't want to bet on things working out. It is one thing to claim that a company needs to cut labor costs, it is another to belittle the wages and aspirations of individual workers.