How Much Do UAW Workers Cost?

Various left-wing commentators have praised an article by David Leonhardt in today's New York Times, denying that workers at Detroit car companies really cost as much as $73 per hour. While he concedes that they are still more costly than workers at Japanese-owned plants, he argues that they aren't as costly as $73 because that number allegedly includes benefits for already retired workers.

But as James Sherk of the Heritage foundation points out, that would be incompatible with established accounting principles. According to established accounting principles set by the Financial Accounting Standard Board, the cost of benefits for retired workers should be taken when they're accrued (when the workers are still working). It is not permitted for companies to promise workers benefits after they've retired without taking it up as a cost now. Leonhardt appears to have derived his figures by only including wages and benefits paid out today to workers, while excluding both the post-retirement costs that are accrued for current workers and the benefits paid out to currently retired workers, which of course is very misleading.