According to this Boston Globe story, the average Verizon worker currently on strike earns total compensation of about $130,000 per year. If there is a defined benefit pension plan and Verizon doesn’t have a letter from God stating the year in which each current worker will actually die, the cost to Verizon shareholders of these workers could be quite a bit higher.
For a company with a bunch of older workers whose pension costs are high, you’d think that an opportunity to replace those folks with younger workers on a 401k defined contribution pension plan would be welcome. What are the actual obstacles facing Verizon in bringing in permanent replacement workers (nytimes) at a number closer to Massachusetts median household income of about $68,000 per year (Boston Globe)?
Separately, I think it is interesting that the Globe implies that Verizon should be required to pay workers more than $130,000 per year. payscale.com says that the Globe itself pays employees between $25,000 and $70,000 per year (benefits presumably add something to this).
Why are people so excited about this? The ADP paycheck calculator says that $130,000/year pre-tax is $85,658/year after tax. If the Verizon jobs disappear, aren’t there other ways for people to get hold of $85,658 per year? The Houston Chronicle‘s analysis of BLS data shows that the typical American, regardless of education level, can’t expect to earn this much by working. Perhaps there a way to get to the same standard of living of a striking Verizon union worker without working? A Massachusetts resident could obtain nearly the same spending power by having sex with two partners, each of whom earns $250,000/year (managers at Verizon?), obtaining custody of the resulting two children, and collecting for 23 years under the Massachusetts child support guidelines. A Massachusetts resident who already has custody of at least one child and who has a friend in one of the central public housing ministries, e.g., Cambridge or Boston, could obtain a luxury rental in a new building with a market value of $48,000 per year plus MassHealth (Medicaid) valued at about $15,000 per year. It is hard to see how collecting traditional welfare could result in harvesting the remaining $22,000+ without working, though perhaps it would be possible to earn $22,000 per year in after-tax dollars by working part-time in jobs that are paid in cash, e.g., 1222 hours at $18/hour as a babysitter.