The cost of labor at auto companies
We hear repeated claims that GM's workers enjoy salaries that are rather high, substantially higher than people working for foreign manufacturers in U.S. plants. Mitt Romney refers to this in his NYTimes op-ed; I think somewhere else I saw a claim that salaries for comparable positions are on average 20% higher for the Big 3 than for Toyota.
Many of the non-Big 3 auto factories were established relatively recently, in whatever region of the country offered the best tax breaks and the lowest prevailing wages for decently educated workers. Many of these plants are in South Carolina, Kentucky, etc. Is it possible that the cost of living is substantially lower in these areas than it is in Michigan?
I realize there's a bit of a chicken-and-egg aspect to this question: if the cost of living in Michigan is high, it may be in part because of the higher salaries. But even if that's true, it would not be reasonable to propose cutting the wages without regard to cost of living.
One data point: I looked at the "Average (annual) total household expenditure" figures in the Moving.com calculator. Michigan: $51,700; Kentucky: $44,600, South Carolina: $45,400. Hmmm.
Many of the non-Big 3 auto factories were established relatively recently, in whatever region of the country offered the best tax breaks and the lowest prevailing wages for decently educated workers. Many of these plants are in South Carolina, Kentucky, etc. Is it possible that the cost of living is substantially lower in these areas than it is in Michigan?
I realize there's a bit of a chicken-and-egg aspect to this question: if the cost of living in Michigan is high, it may be in part because of the higher salaries. But even if that's true, it would not be reasonable to propose cutting the wages without regard to cost of living.
One data point: I looked at the "Average (annual) total household expenditure" figures in the Moving.com calculator. Michigan: $51,700; Kentucky: $44,600, South Carolina: $45,400. Hmmm.