Krugman, Obama, Summers and the rest of the liberals, thinking big thoughts,
believe that the stimulus will fix things for workers. It won't.
Gene Coyle
November 19, 2010
Unions Yield on Two-Tier Wage Scales to Preserve Jobs
By LOUIS UCHITELLE
MILWAUKEE — Organized labor appears to be losing an important battle in the
Great Recession.
Even at manufacturing companies that are profitable, union workers are
reluctantly agreeing to tiered contracts that create two levels of pay.
In years past, two-tiered systems were used to drive down costs in hard times,
but mainly at companies already in trouble. And those arrangements, at the
insistence of the unions, were designed, in most cases, to expire in a few
years.
Now, the managers of some marquee companies are aiming to make this concession
permanent. If they are successful, their contracts could become blueprints for
other companies in other cities, extending a wage system that would be a
startling retreat for labor.
Though union officials said they could not readily supply data on the practice,
managers have been trying to achieve this for 30 years, with limited results.
The recent auto crisis brought a two-tier system to General Motors and
Chrysler. Delphi, the big parts maker, also has one now. Caterpillar, back in
2006, signed such a contract with the United Automobile Workers.
The arrangement was a fairly common means of shrinking labor costs in the
recession of the early 1980s. At the end of the contracts, however, wages
generally snapped back up to a single tier. At G.M., Chrysler, Delphi and
Caterpillar, the wages will not be snapping back.
full at:
http://www.nytimes.com/2010/11/20/business/20wages.html?_r=1&hp=&pagewanted=print
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