UAW Fights Two-Tier Wage System Culture in Detroit

Following the recession, automakers did just about anything to help boost profits and keep their respective companies afloat, including the establishment of a wildly unpopular two-tier wage system. The two-tier wage system, which has spent the last few years under heavy attack, was adopted in 2007 and aimed to pay new hires less in wages and benefits than the veteran employees that they work alongside.

Auto Workers at Labor Day Parade Call for an End to Two-Tier Wages“Since we’ve implemented the two-tier, it has absolutely caused a divide among our membership on both sides of the aisle,” said Brian Hartman, president of UAW Local 2209 in Roanoke, Indiana.

Currently, about 20% of the workforce in many of the Detroit-based factories is considered to be in the lesser, Tier 2 section of the workforce. However, if the workers and the UAW have their way, it won’t be this way when the present contract negotiations come to an end.

That’s because the UAW believes that the workers have paid their dues, helping the companies survive during the recession by agreeing to take lesser pay and benefits. Now that the automakers are back in full swing, though, cashing in at record breaking levels, the workers believe it is time for their status and their wages to be elevated again.

“We have to be focused on bridging that gap,” said UAW president Dennis Williams in an interview earlier this year. “The companies need to recognize the fact that the (veteran employees) haven’t had a raise.”

“We don’t want to have a confrontation unnecessarily. I just think there’s too much at stake for any of us to pick a fight with one another. We have big issues — there’s no doubt about it — but I think, realistically, companies have to know… our members have sacrificed. I think that new people coming in want a higher standard of living and I don’t think that’s unreasonable. We’ll find out when we get to the table.”

These contract negotiations, of course, follow a recent high-profile victory for workers in Indiana earlier this year.

Following a one day strike, workers at the Indiana-based Lear Corporation secured a new contract that ended the two-tier system that had also been put in place at their factory.

2tier2“The tide is turning for auto parts workers, who for too long have been stuck with fast-food-like wages,” said Local 2335 President Jaime Luna following the decision. “The agreement is a victory not just for the workers at our plant, but for thousands of auto workers across the country who do the same hard work we do and will benefit from the higher standard we achieved by taking a stand.”

For Detroit’s workers, though, the future is still uncertain and thousands of workers are hoping to be justly compensated for their hard.

“I think that the Detroit Three companies are going to look for continued restraint in overall labor costs and things that are more flexible and contingent will be their demands,” said Kristin Dziczek, director of the Industry & Labor Group at the Center for Automotive Research in Ann Arbor. “Things that will raise cost will be difficult with the companies.”

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