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The Two-Tiered Wage System


Good piece on the two-tiered wage system at UAW organized auto plants.

Like a lot of labor people, I am really torn by this. On the one hand, it has helped get more people decent (if not now great) jobs. It has helped keep the United States from an even more intractable unemployment problem and allowed some workers to hold onto middle class dreams.

On the other hand, is there any question that the automakers are going to eliminate the upper-tiered wage system entirely and go almost exclusively with the lowered-tier system, not only for new hires, but for a total reworking of the compensation system?

But what is the UAW to do? So long as the American government encourages businesses to move manufacturing abroad, unions have few tools to push for the wages that created the American middle-class after World War II. The UAW wants jobs as much as anyone and maybe it can help these lower paid workers make a bit more if it gives concessions for higher paid workers. That’s a reasonable strategy.

More broadly though, this piece again reminded of manufacturing’s importance for this country’s future. I simply see no evidence suggesting a post-industrial economy can create long-term middle-class employment for a majority of American workers. Yet both government and private business increasingly downplay manufacturing in thinking about the economy of the future. It’s hardly a wonder that our business leaders and policy makers are failing so miserably at rejuvenating the economy. They gladly give away the tools that made our country great.

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