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So, let's compare the automotive industry then. I might be mistaken, but I'll try my best. And yes - I totally ignore taxes, healthcare, and anything else - whi

So, let's compare the automotive industry then. I might be mistaken, but I'll try my best. And yes - I totally ignore taxes, healthcare, and anything else - which might be important, so... take it with a grain of salt. In the year 1916, Henry Ford lowered the price of the Model T to 345 USD[1]. Using an inflation calculator[2], this tranlates to roughly 8120 US-$. At the same time, Ford raised the salary to 5 US-$ per day[1]. That makes 160 US-$ per Month (calculating with 4 x 5 days). Using the same calculator as in[2], we end up with a value of 3766 US-$. So a Model T costs 2.5 months of labour for an average worker. Fast forward 2019 - the avarage salary is maybe 40k US-$ a year for an automotive worker?[3] So, using the same reference as above, this would translate to 166 US-$ per day, and 3320 US-$ per month. Now, what's the successor of the Model T nowadays? I don't know - so I followed the "successor" links in the Model T wiki article[4], and ended up at the Ford Fusion. Ford says, it's starting at 23.170 US-$[5]. That's 7 months worth of labour for an average worker. So, yes - compared to 1916, it's 2.5 times more expensive. I'm surprised. [1] https://www.fomcc.de/t.htm https://www.fomcc.de/t.htm (German page, sorry) [2] http://www.in2013dollars.com/us/inflation/1916?amount=345 http://www.in2013dollars.com/us/inflation/1916?amount=345 [3] https://www1.salary.com/Automotive-salaries.html https://www1.salary.com/Automotive-salaries.html [4] https://en.wikipedia.org/wiki/Ford_Model_T https://en.wikipedia.org/wiki/Ford_Model_T [5] https://shop.ford.com/build/fusion https://shop.ford.com/build/fusion (I used 10005 as postal code, cause I'm not from the US)

bumby 7y ago
Appreciative of the breakdown, but I think there might be some issues with your methodology. For one, far fewer households today are single salary. Say what you will about whether this is a good or bad thing, but I think it's probably more appropriate to base the numbers on an "automotive household income" if that's such a thing. Also, your salary resource is a little weak. It has a huge range ($34k-$144k average). I speculate this isn't relegated to just using automotive manufacturers but also includes their suppliers. Anecdotal experience shows me that the lowest paid Tier 2 union employees on a line make that much if you include overtime. Tier 1 workers make much more (close to double, in my experience). Then you take the skilled trades (e.g., electricians and machinists) where its more common than not to make six figures, all things considered. This is all before we're getting to the degreed engineers. Payscale.com shows average Ford engineer salary nearing $90k. Engineers on the line generally make more because of the work conditions and overtime (it wouldn't be uncommon for a process engineer to make double that). I don't know what the actual numbers are, but I wouldn't balk at data that's easily double the numbers you covered. It could easily be on-par or even below the Model-T numbers when it comes to monthly household income.
- sarcher 7y ago
  When Henry Ford set minimum salaries, he wasn't impacting the wages of the engineers who designed the cars - he was impacting the wages of those who made less than $5 at the time the change was made. A minimum wage was being set, not an 'average' wage. So comparing a $5 minimum wage to the 'average wage today including white collar workers like line engineers' fails to be a convincing comparison. It's even less convincing now that I realize, after reviewing your comment, that you're including overtime wages for "Tier 2 union employees" when MrGilbert's data specifically doesn't include overtime wages. If you need to work overtime today to have the same relative affordability as that available a century ago - that's not progress! And when it comes to 'automotive household income' the numbers work out even worse than MrGilbert's example. The average American household owner more than one car per driving adult. https://www.bts.gov/archive/publications/passenger_travel/chapter2/figure2-6 https://www.bts.gov/archive/publications/passenger_travel/ch... Yes, yes - perhaps the autoworkers we are talking about are not 'average' and own fewer cars per household. And yes, yes - moving the minimum wage probably resulted in wage increases for higher paid workers as well. If you want to move the goalposts again do some legwork and show some work, otherwise you're just promoting a paper-thin narrative on the basis of "but what if".
  - bumby 7y ago
    I think the 'more than one car per household' is a fair point but I think it gets watered down by the >1 car per driving adult...this may be just that we consume more, not need more. If that's the case, it implies vehicles are more accessible today, not less. But I stand by the assertion that claiming a $40k average wage is way off. The base salary of most Tier 1 non-skilled employees was still in the $70k-$80k range, and this was years ago. The skilled trades made much more. This is without overtime. It seems like MrGilbert was cherry picking the data. And I hope you also realize that there is a difference between the manufacturing engineers and design engineers. Manufacturing engineers probably should be included in my opinion, and they are some of the highest paid, but I'd even be willing to concede that and still stand by the general point. I included overtime because it is a such a large part of the manufacturing experience. And yes, some people game overtime as a way to inflate their wages. And the overtime pay increases didn't come about until the Fair Labor Standards Act. If you look at the history, the $5 per day wage actually does include overtime (if you define overtime by today's standards). We could debate whether or not this is progress (many of those I personally knew would call it progress because they wouldn't have the opportunity to make that wage elsewhere, which is why there is little turnover even today). I actually don't think it's unfair to include overtime to get the total compensation comparison, but even without overtime the $40k number seems pretty far off. The larger point being, it's not as simple of a comparison as 'don't include overtime' and select the lower end of the overall automotive salaries (including lower paid suppliers). We can further complicate things by factoring in the preferred employee pricing etc. It's complicated, even if we want it to be a simple narrative. The loss of manufacturing jobs is a big part of the reduction in size of the middle class United States, especially in the Rust Belt. This is largely due to automation reducing the number of available well-paying jobs not because the car companies are systematically mistreating workers. People still vie heavily for those jobs because they are some of the highest paying jobs available.

bumby 7y ago

Appreciative of the breakdown, but I think there might be some issues with your methodology. For one, far fewer households today are single salary. Say what you will about whether this is a good or bad thing, but I think it's probably more appropriate to base the numbers on an "automotive household income" if that's such a thing. Also, your salary resource is a little weak. It has a huge range ($34k-$144k average). I speculate this isn't relegated to just using automotive manufacturers but also includes their suppliers. Anecdotal experience shows me that the lowest paid Tier 2 union employees on a line make that much if you include overtime. Tier 1 workers make much more (close to double, in my experience). Then you take the skilled trades (e.g., electricians and machinists) where its more common than not to make six figures, all things considered. This is all before we're getting to the degreed engineers. Payscale.com shows average Ford engineer salary nearing $90k. Engineers on the line generally make more because of the work conditions and overtime (it wouldn't be uncommon for a process engineer to make double that). I don't know what the actual numbers are, but I wouldn't balk at data that's easily double the numbers you covered. It could easily be on-par or even below the Model-T numbers when it comes to monthly household income.

sarcher 7y ago
When Henry Ford set minimum salaries, he wasn't impacting the wages of the engineers who designed the cars - he was impacting the wages of those who made less than $5 at the time the change was made. A minimum wage was being set, not an 'average' wage. So comparing a $5 minimum wage to the 'average wage today including white collar workers like line engineers' fails to be a convincing comparison. It's even less convincing now that I realize, after reviewing your comment, that you're including overtime wages for "Tier 2 union employees" when MrGilbert's data specifically doesn't include overtime wages. If you need to work overtime today to have the same relative affordability as that available a century ago - that's not progress! And when it comes to 'automotive household income' the numbers work out even worse than MrGilbert's example. The average American household owner more than one car per driving adult. https://www.bts.gov/archive/publications/passenger_travel/chapter2/figure2-6 https://www.bts.gov/archive/publications/passenger_travel/ch... Yes, yes - perhaps the autoworkers we are talking about are not 'average' and own fewer cars per household. And yes, yes - moving the minimum wage probably resulted in wage increases for higher paid workers as well. If you want to move the goalposts again do some legwork and show some work, otherwise you're just promoting a paper-thin narrative on the basis of "but what if".
- bumby 7y ago
  I think the 'more than one car per household' is a fair point but I think it gets watered down by the >1 car per driving adult...this may be just that we consume more, not need more. If that's the case, it implies vehicles are more accessible today, not less. But I stand by the assertion that claiming a $40k average wage is way off. The base salary of most Tier 1 non-skilled employees was still in the $70k-$80k range, and this was years ago. The skilled trades made much more. This is without overtime. It seems like MrGilbert was cherry picking the data. And I hope you also realize that there is a difference between the manufacturing engineers and design engineers. Manufacturing engineers probably should be included in my opinion, and they are some of the highest paid, but I'd even be willing to concede that and still stand by the general point. I included overtime because it is a such a large part of the manufacturing experience. And yes, some people game overtime as a way to inflate their wages. And the overtime pay increases didn't come about until the Fair Labor Standards Act. If you look at the history, the $5 per day wage actually does include overtime (if you define overtime by today's standards). We could debate whether or not this is progress (many of those I personally knew would call it progress because they wouldn't have the opportunity to make that wage elsewhere, which is why there is little turnover even today). I actually don't think it's unfair to include overtime to get the total compensation comparison, but even without overtime the $40k number seems pretty far off. The larger point being, it's not as simple of a comparison as 'don't include overtime' and select the lower end of the overall automotive salaries (including lower paid suppliers). We can further complicate things by factoring in the preferred employee pricing etc. It's complicated, even if we want it to be a simple narrative. The loss of manufacturing jobs is a big part of the reduction in size of the middle class United States, especially in the Rust Belt. This is largely due to automation reducing the number of available well-paying jobs not because the car companies are systematically mistreating workers. People still vie heavily for those jobs because they are some of the highest paying jobs available.