The two-tier wage system: fairness vs. employment

The Takeaway

Four years ago, the United Auto Workers Union allowed the three Detroit auto makers to put in place a two-tier system  for paying employees, which allowed them to continue to functioning and stay in business as they struggled to stay afloat. New hires were given a salary around $14 an hour, while their tier-one counterparts were making almost double that.  The system has helped increase employment in Detroit and kept the auto giants from tanking, but many people say it’s unfair. Elisa (who asked us not to use her last name),  a  worker at one of the auto giants in the Detroit area, and  Mitchell (last name also  omitted), who works for GM’s Lansing plant in Michigan, speak about their experience as second-tier employees.  Peter Cappelli, George W. Taylor professor of management at the University of Pennsylvania’s Wharton School, talks about whether this system could work for other industries.

Invest in independent global news

The World is an independent newsroom. We’re not funded by billionaires; instead, we rely on readers and listeners like you. As a listener, you’re a crucial part of our team and our global community. Your support is vital to running our nonprofit newsroom, and we can’t do this work without you. Will you support The World with a gift today? Donations made between now and Dec. 31 will be matched 1:1. Thanks for investing in our work!