11-24-2008, 06:54 AM
Dakota wrote:
[quote=$tevie]
[If you take the costs associated with 721,025 individuals and then divide those costs by the hours worked by 180,681 individuals, you're going to end up with a very large hourly rate. But it won't mean anything, unless you're trying to be deceptive.
http://www.portfolio.com/views/blogs/mar...-hour-meme
What is wrong with the formula? The individual worker may not get paid that much but it costs GM that much per hour. Who cares where the money goes?
It doesn't cost GM that much per hour.
The fiction is that only the wages of present-day workers are used to pay for the benefits of all of the retirees.
If you're going to work it as an hourly wage/benefits equation then start with the premise that the cost of the retirees benefits originated with their hourly wages when they were working. After all, benefits are part of a person's employment package, aren't they?
The money for those retirees' benefits should have been going into a fund all along. A business that assumes worker-compensation as debt each year without paying it down is doomed to failure. It would be no more than a thinly-disguised Ponzi scheme.