US: auto workers wages still low image

Although in 2013 the car industry grew at a great pace and all automakers in the US rallied to supply the demand, adding additional shifts at their plants, the growing problems in the industry still keep wages low.

According to data from the US Bureau of Labor Statistics, average hourly wages for auto industry production-line workers were 6% lower than their peak in February 2008 – from $29.96 to $28.06.

These lower numbers – we should also take into account price changes from inflation – actually reflect the struggles that all of the big three Detroit manufacturers went through. GM and Chrysler in 2009 went into bankruptcy to allow a faster restructuring, while Ford did it without government help.

The declining average pay also brings to light a new practice among US automakers – there are now higher proportions of tier-two workers, new employees on far worse terms and conditions than older workers who enjoy healthcare and pension benefits. This practice allowed some of the plants bring into production models that would otherwise go to lower paid countries, like Mexico.

Also, the total number of auto industry workers in the US is now down to around 187,000 – from the 266,000 peak of March 2003. The number is on a growing trend though, recuperating from the low point of 122,000 in January 2009.

Via Financial Times