Back in 2007-08, U.S. automakers and the United Auto Workers union signed landmark labor contracts that included many concessions on behalf of workers to keep the companies they work for competitive. Among them was an agreement to a two-tier wage structure that allowed automakers to start hiring replacements for retirees at a lower starting wage of $14-16/hour.

As one might expect, the people who got these lower paying jobs aren't too happy about the disparity in pay anymore. They've begun to organize with the hope of repealing the two-tier wage structure in negotiations leading up to the current four-year contracts' expiration on September 14. About 50 people showed up to a rally held at a church in Detroit over the weekend to express their opposition.

These opponents claim the pay disparity causes rifts on the factory floor, effectively turning union members against each other at a time when solidarity is most important. According to The Detroit News, they also argue that the two-tier structure erodes the middle class and could lead to pay cuts for the first-tier workers who start at $28/hour.

UAW President Bob King has reportedly said that the union would like the starting wage of second-tier workers increased in the next contract, but has not committed the organization to calling for its outright repeal. The other interesting wrinkle is that union workers for both General Motors and Chrysler gave up their right to strike by accepting government-funded bailouts. Only union workers for Ford may choose to exercise that right next month if things don't go their way at the bargaining table.


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  • 129 Comments
      third3ye82
      • 3 Years Ago
      Really guys? How about waiting until after the country gets out of its recession before making demands that'll send the industry back into the red again? Geez...
      Ducman69
      • 3 Years Ago
      A while back on TV they had the host doing rounds at a UAW plant, and after a few minutes of instruction they had him doing one of the guy's jobs. When someone with less than fifteen minutes of training can do your job, that is considered menial labor, and last I checked that warranted minimum wage in the private sector. To have a starting wage of $16 plus the HUGE amount of benefits that they get on top of this that trumps anyone else in any other industry, and then to bitch and moan about THAT? And they wonder why Ford is spending billions of dollars to setup plants in the middle of nowhere outside the US just to avoid dealing with the UAW.
        TelegramSam
        • 3 Years Ago
        @Ducman69
        But can that person do that same job day in and day out, with the same level of proficiency. Doing a mindless job is easy for 15 minutes, but much harder to do indefinitely which is what plant workers do. The top tier UAW employees do make a good living, but I would not want to do what they do.
          • 3 Years Ago
          @TelegramSam
          [blocked]
          Gorgenapper
          • 3 Years Ago
          @TelegramSam
          Because the inherent ability to switch off your mind and become a mindless robot is worth top dollar? I'm already doing that 24/7, it's called 'breathing'. Now pay me $28/hr, k? You know in going to spend all of it on booze and drugs to consume over lunch anyway.
        John S
        • 3 Years Ago
        @Ducman69
        Oprah did the same thing when she toured the Pontiac plant when she gave away all those G6's.
      Dustin Barton
      • 3 Years Ago
      Raise the wage from $14-16/hr? Seriously? Be thankful you have a job, especially one that pays so well for non-skilled workers. If anything GM should REDUCE the wages to $10-12. If they unskilled laborers what to earn more, go to school and get an education. Note: my family has been a "GM" family for decades and are members of the UAW and even they agree that these workers need to pull their heads out of their ***'s and be thankful they receive a paycheck to pay bills.
        Joe Bo
        • 3 Years Ago
        @Dustin Barton
        I'd gladly take a job for $16 per hour and I've got an undergraduate degree.
          Dustin Barton
          • 3 Years Ago
          @Joe Bo
          Ditto. I have a bachelor's and I'm working as a CSR right now, making $23,000/yr or about $11.xx/hr (which is rather low in this area, and for my degree). Tough times...and the UAW wonders why no one likes them.
          ngiotta
          • 3 Years Ago
          @Joe Bo
          I have no degree, but work for a Fortune 50 corporation as a Sr. Software Engineer. While I make more than most of my co-workers that have a BS or higher in Computer Science, I recognize that I'm in the minority. I would like to point out, however, that many of my co-workers who posses college degrees use them as a crutch in to make up for their lack of proficiency, experience or both.
          Essende
          • 3 Years Ago
          @Joe Bo
          @Dustin, maybe you have a crappy degree, I know a bunch of college "educated" people that has "BS" majors in psychology or business management and then they cry that they can't find a job. Reality is that even when you finish college, you better pick a field where the demand is. If you will have a Bachelor in Math or Engineering, you'll be fine, this country is in short supply of that and there is plenty of good paying jobs there. But a lot of kids these days don't want to look into that direction because it is too "hard". Anyway, going back to the article, I guess USA needs restructuring, from government to the way people run large corporations. Reality is that CEOs without $10 per hour workers are nothing, so a bit of mutual respect should go a long way. Best example right now is Verizon, company just posted billions of dollars in profits and yet the bright executives want to cut peoples health insurance and other benefits, just taking advantage of the economic situation, lots of people have busted their asses of for years and the company is actually growing but yet they always find a way to screw the little guy. Not everything is just black and white.
          Dustin Barton
          • 3 Years Ago
          @Joe Bo
          @Essende - My Bachelor's is in Administration, but never-the-less, I am "educated" and am capable of doing far more than line work like these people who are making $14-16/hr. What it really boils down to is the perceived value of jobs. Someone working on the line, with little education or skill, shouldn't be making more than your average "skilled" worker. More to the point, why should a UAW worker be making $14/16/hr for line work when someone working at Home Depot on the freight team stocking the shelves (including 85 lbs cabinets) be paid $9/hr? I've seen those guys strapped to the order picker 20 feet in the air hoisting those cabinets onto the top shelves. No reason the line workers should be making so much more than them.
        Dustin Barton
        • 3 Years Ago
        @Dustin Barton
        In my fury I made a few typos. Should read "If the unskilled laborers want to earn more..." :)
      kevsflanagan
      • 3 Years Ago
      Ok how about this UAW. Ford will compromise, they'll create a 1 teir pay program. That teirs pay rate will be that of 20-23hr. I doubt that will happen so what about a 3 teir pay program. First teir for those who are new to 5 years. The second teir for those 5-10 years. Lastly the 3rd teir will be for those who have been there 10 year or more. I'll ignore the fact that I personally know several people who would love to be paid $16hr for what amounts to torquing lug nuts onto a wheel hub, or using a phillips head screw driver to install a dash over and over again. So yeah UAW shudup and be happy your plant(s) haven been moved south of da boarder.
      gary
      • 3 Years Ago
      The logical solution is not to inch the tier-2 workers up to tier-1 wages, but bring the tier-1 workers down to an equilibrium point where everyone is on essentially the same pay scale, with appropriate differentials for longevity/experience. As UAW membership turns over and the tier-2 guys become a larger block, Bob King and his successors are going to have a harder time justifying to them why they have to work for a 40th-percentile wage-and-benefit package so the o the "old guard" could continue to maintain a 75th-percentile lifestyle. And we all know that paying unskilled factory workers a 75th percentile wage will not fly in a cut-throat competitive global auto industry.
        montoym
        • 3 Years Ago
        @gary
        The tier 2 wages are stated in the contract as making up 20% or less of the total workforce. The vast majority are still under Tier 1 wages. Only new hires in non-production jobs receive the Tier 2 wages and they can move up from those wages as they gain experience or learn a new job which is eligible for the Tier 1 wages.
      Temple
      • 3 Years Ago
      So they want an end to the bottom-tier of the two-tier wage structure. They don't want a one-tier wage structure that would mean the top and bottom would meet in the middle for wages and would mean a wage-cut for first tier workers. They want a pay increase for second-tier workers and more money from the Big 3. Considering the economy is still in the gutter, and people in general are still scrambling for jobs or are worried about the jobs they already have, I'm not sure how much sympathy the UAW will get, especially as every taxpayer just pitched in to save Detroit, most people want to give the resurgent Big 3 some breathing room.
      DUKE
      • 3 Years Ago
      UAW Are you CRAZY ! Slap them rookies upside, No Shame, maybe they should look for Jobs in Mexico I hear they are going to build a new plant.
      DeBinder
      • 3 Years Ago
      I can understand why the UAW wants to get rid of that two-tier wage structure, but I think they ought to be grateful for what they got. It was union demands, union wages and union benefits that drove GM and Chrysler into bankruptcy, and let's not forget all those UAW members that the UAW collectively bargained out of a job. GM may sell a lot of product, but it still isn't enough for GM to make it on its own without nationalization and tax payer bail out money. Let's see GM pay back the US tax payers first, and then worry about getting rid of that two-tier wage structure. A lot of former GM customers are driving Ford these days, because Ford made it on its own without direct bail outs and nationalization.
      mbukukanyau
      • 3 Years Ago
      Why not just do 'what is fair" according to the thinking of Union Ideology. They charge a flat fee per head accross the board and then, everyone one who is a union member gets the same pay, no matter what it is they do.
      Radius
      • 3 Years Ago
      The bottom line is that you have to be competitive on a world wide basis. Labor costs (wages & medical) are a component and if they are out of line then everyone loses. If you spend more on wages then you have less to spend on R&D or features that are in the car and you are not competitive. Part of the reason GM & Chrysler went Bankrupt in the first place. Some reports said the GM had a $1500 to $2000 a car cost disadvantage (cost not price) with Toyota a few years back. If wages get out of line again them we will end up with the problem again.
      CharlieS
      • 3 Years Ago
      I work at a UAW plant at Caterpillar but I'm a salary engineer. I go out there and talk to a lot of the younger guys and older guys, and all the older guys think the young guys are crazy for wanting to make as much as them. The old guys that have 30+ years at the plant said when started, they made $2 an hour and nobody seemed to bitch. Most of the old guys are retiring in September due to the new labor contract.
      Justin
      • 3 Years Ago
      RU kidding me, people are unemployed and these workers are complaining about what some Americans would love to get... The UAW is out of its mind, its one thing to protect workers rights its another to flip flop on an agreement. If they signed the agreement they need to abide by it. You dont like your blue coller job then go find something else... You make me sick...
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