Re: GM bust - Canadian Implications

The $6 per hour you were earning is only PART of the Hourly Labor Costs. The Hourly Labor Costs is what it costs to employ a person. Some of the
basic things that are included in the Hourly labor cost are, the employers half of your FICA, workmen's compensation taxes, State and federal unemployment taxes. The cost of the premium for your pension plan and medical coverage for you and your family and the costs of administering those plans, bookkeepers accounts etc...
Some of the ancillary costs, depending on the size of the plant can be supplying and maintaining things likes parking lots, lunch rooms, change rooms, transportation within the plant and the wages of the people that do those types of thing. Cleaning, snow plowing, cutting the grass, trimming the hedges, painting, security etc.
The Japanese do have some of those costs and do not pay them for retirees. They do not have defined pension plans, they offer 401Ks to which they will pay a portion if the employee joins the 401K and contributes to a limited matching amount. Some provide much less desirable healthcare benefits and then it is limited to the employee, unless he pays an additional premium to cover each family member.
Although not related to labor cost the Japanese have the advantage of paying only state and local taxes. Because of Japanese tax laws they have no adjusted tax balance on which to pay Federal Corporate taxes. Even with all those advantage the average Japanese car sold, that is assembled in the US, has a 20% to 30% higher drive home price than a comparably sized and equipped domestic
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