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The employer wishes to reduce overall wage costs by hiring new employees at a wage less than the wage of incumbent workers. [1] [2] A much less common system is the two-tier benefit system, which extends certain benefits to new employees only if they receive a promotion or are hired into the incumbent wage structure. [3] [4] [5]
A second-tier wage of $14.50 an hour, which applies only to newly hired workers, is lower than the average wage in non-union auto companies in the Deep South. [47] One of the benefits negotiated by the United Auto Workers was the former jobs bank program, under which laid-off members once received 95 percent of their take-home pay and benefits.
On October 25, a tentative agreement was reached between the UAW and Ford; it includes an 11% wage increase in the first year, and total 25% increase in wages over the 4.5 year contract, a $5,000 ratification bonus and a cost-of-living adjustment. When including cost-of-living adjustments, total pay could be raised by 30%.
A two-tier pay or benefit system can also chip away at the power of labor unions since new hires may be less inclined to join, leading to lower union membership and divided workforces.
UAW workers hired after 2007, for example, are granted 401(k)s instead of defined pensions. In 2021, workers at health care giant Kaiser Permanente and the cereal maker Kellogg authorized strikes ...
The agreement grants 25% in base wage increases through April 2028, and will cumulatively raise the top wage by 33% compounded with estimated cost-of-living adjustment (COLA) to over $42 an hour ...
WAYNE, Michigan (Reuters) -Striking auto workers converged on a Ford assembly plant on the outskirts of Detroit on Friday morning to show their support for the most ambitious labor action in ...
Tiers for the Detroit automakers were created starting in 2007 as the UAW tried to help them out of serious financial troubles. Auto worker strike highlights disparities between temporary and ...