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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%.
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.
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.
She said a two-tier wage system prevents newer employees from making the same financial gains as legacy autoworkers like herself and her late father, who spent 40 years at Ford.
The UAW is pushing automakers to eliminate the two-tier wage system under which new hires can earn far less than veterans. Long walkouts at factories producing large pickup trucks could cost the ...
On Thursday, Chief Executive Jim Farley warned of a grim scenario if Ford acquiesced to union demands for a 40% hike in pay, an end to the tiered wage system and a return to defined-benefit pensions.
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 ...