Robert Samuelson told readers this morning that, "today's retired and well-pensioned autoworkers have condemned those who followed to lower-paid jobs or no jobs at all." As a matter of economic theory, it is almost impossible to imagine what Samuelson could be thinking. How does a worker get less money because someone of a prior generation received a good pension? Is the worker's marginal product now lower? Presumably Samuelson is arguing that pensions and health care benefits have been a major drain on the big auto companies. This is of course true, but this was due to the incompetence of highly paid pension fund managers and their Wall Street consultants who were too dumb to recognize a stock bubble in the mid-90s. Let's keep the evil-doers straight. The company's 7-figure executives control the pension fund. The fact that they didn't know what they were doing weakened the big three. The problem is with the 7-figure crew, not the people who worked for a living on the assembly line.
--Dean Baker
