Large manufacturing companies are using the weak economy as leverage to force organized labor into accepting different levels of wages for workers that would last long into the future, even after a recovery kicks in.

 

Use of two-tier labor systems—in which new hires earn less than current employees—was used in the 1980s when businesses convinced unions that concessions were necessary to bring operations back into the black. But unlike the Eighties, when companies agreed to go back to one pay structure after good times returned, corporate executives today are hoping to make two-tier systems permanent.

 

Two-tier systems now exist at General Motors, Chrysler, Delphi, Caterpillar, Harley-Davidson, Mercury Marine and Kohler. The latter three companies, all based in Wisconsin, “are systematically implementing a major strategy to permanently drive down wages far below anything considered ‘middle class,’” writes Roger Bybee at In These Times.

-Noel Brinkerhoff

 

Firms See Long-Sought Goal in Sight: Major Pay Cuts Through Two Tiers (by Roger Bybee, In These Times)

Unions Yield on Wage Scales to Preserve Jobs (by Louis Uchitelle, New York Times)