Two-Tier Wages

473 Words1 Page
bulb-icon

Recommended: Impact of the american automobiles industry

1. The renewed job growth in the automobile industry in the United States is an effect of the use of two-tier wages. Two tier wages are pay structures that consist of different wages for old and new employees. Workers are getting paid at different rates. This happened to boost the job growth in the automobile industry significantly by providing a cost efficient pay scale for companies. Also, the labor cost of vehicles decreased, which knowingly helped companies. 100,000 people were employed in the late 1900s. The number was reduced to 550,000 during bankruptcies and the recession. The two tier wage helped stop this problem by increasing employment by a few hundred thousand.
2. It is not very sustainable for job growth to be based on two-tier wages. This type of pay structure was not viable, and it was implemented for a quick solution to the automobile job market. Mr. Marchionne stated that is was not a viable structure because two classes of workers worked within an industry. This type of structure is not built for unison, which is needed for long-term success. High turnover rates and strikes are potential drawbacks of a two tier wage. The drawbacks are expected to materialize when the structure has been used for too long.
3. The use of non-GM workers at the Chevy …show more content…

I believe the two-tier wage structure will go away in the near future. It has served its purpose in the automobile industry and was only needed to quickly boost the job growth. It does not have longevity in this industry. In this pay structure, employees are not getting paid equally for their tasks. The drawbacks will eventually outweigh any advantages that the industries benefit from, which include short-term cost reductions. Ford converting its Tier 2 workers to Tier 1 wages for a small fraction of the $6.9 billion North American profit earned is taking advantage of employees. I understand that the goal of a company is to make money, but I believe that the personnel deserves more pay for their

Show More
Related

  • GMFC Case Study

    1398 Words  | 3 Pages

    It is also the one of the hardest components for management to fulfill. GMFC needs to be an industry leader in pay as well as implement a merit pay policy for employees. Leading the industry in pay and awarding employees pay increases equal to or better than what the union can negotiate is instrumental to keeping the plant union-free (Fossum, 2012). Also basing pay increases on performance and skills learned is a great incentive to boost productivity and employee motivation. As an example, Volkswagen starts their employees the base rate the union would be able to negotiate keeping employees content (Greenhouse, 2014).

    Read More

  • Chrysler Two-Tier Wage System Case Study

    947 Words  | 2 Pages

    Furthermore, new workers would be paid depending on how much experience they had with other automobile companies. Under my proposed system, all workers will be eventually guaranteed to be paid up to 30 dollars per hour as long as they are productive and devoted to serving our company. If this system were to be a success, then income disparity between workers should be smaller compared to that of the two-tier wage system creating better equality in pay among workers. In addition, this type of system

    Read More

  • The Reality Of The 1920's

    1231 Words  | 3 Pages

    In the real world, life has its ups and downs. In the 1920's, corporations started to take better care of their workers than they had in the past. Workers were paid higher wages and worked shorter hours. With more time and money on their hands, workers turned into consumers, which caused an increase in the production of consumer goods. One of the most popular consumer goods was the automobile. To keep up with the high demand, the automobile industry had to create a way to make a lot of cars in a short amount of time, at a low price. The solution was the assembly line. With the assembly line the time to create one car dropped from 12 hours to 90 minutes. The price of the automobile fell greatly also, which further increased the demand. The automobile industry inspired other industries to form, such as the steel, rubber, petroleum, machine tools, and road building industries. But life wasn't just peaches and cream in the 1920's. Immigrants and farmers were facing some serious adversity. After World War I, the United States began to put a cap, or put a quota, on how many immigrants could come into the country.

    Read More

  • The Similarities and Differences of the 1920’s and 1950’s

    892 Words  | 2 Pages

    The bureaucratization of business in the 1920’s meant that more people could be employed in higher paying white-collar jobs than before, including, for the first time, housewives. This new income combined with the reduced prices for goods that resulted from mechanized production, assembly lines and a general decrease in the cost of technology created a thriving consumerist middle class that went on to fuel the economy in all sectors, especially the upper classes. Likewise, during World War II Americans saved up around 150 billion dollars, and this sum combined with the income of the GI Bill allowed normal people to buy expensive things, from houses to cars to electronics to education at a rapid rate, fueling the trademark prosperity of the 1950’s. The new automobile culture of the 50’s spawned new businesses that catered to mobile Americans, such as nicer and more standardized hotels like Holiday Inn, and drive-up restaurants like McDonalds. Just as the culture of the 1920’s was transformed by modernist ideas, the world of the 1950’s was reinvigorated by the introduction of the automobile to the middle class....

    Read More

  • The Fabulous Fifties

    1723 Words  | 4 Pages

    With World War II bringing thousands of men back to America seeking new lives and opportunities, the US experienced an economic expansion like it had never seen before. During the middle of the twentieth century wages increased 22%, family income went up from $3,000 to $5,400, and the Gross National Product increased from $206 billion to $440 billion. In order for the country to meet the demands of the massive consumptions of the American people, industries had to expand and create more efficient ways of selling there products through advertisements, which as a result provided citizens with more job opportunities.

    Read More

  • New Deal

    788 Words  | 2 Pages

    Although, the growth of business was booming and consumption was extremely high during the 1920’s employers failed to equally distribute the benefits to its industrial workers who got the short end of the stick and did not see any profit from productivity. Since there was no law at the time established on how many hours a person was to work and get paid, employers would overwork and underpay the laborers. This became a major problem because it brought about high unemployment rates, which for laborers, the shortage of jobs meant strong competition among each other for finding and keeping a job, and low wages, which brought down consumption.

    Read More

  • Pay Policy: Ethics Versus Pay

    1721 Words  | 4 Pages

    Almost two years ago the company where I am employed, RGIS LLC, mandated a pay policy change for the hourly employees. Hourly employees make up over 95% of RGIS’s labor staff. This new, four-tier payment scale, aptly named “Pay 4 Performance” (p4), ultimately affected thousands of employees who had been with the company for years and had high pay rates simply as a result of longevity. The four new levels would have a matching pay scale based upon each individual employee’s production. These levels are what RGIS calls an ASET level: Auditor, Specialist, Expert, and TopGun, with each level advancing to a higher production and pay rank, respectively (Company).

    Read More

  • Comparing The Progressive Era And The New Deal Era

    1652 Words  | 4 Pages

    During both the Progressive Era and New Deal Era many American citizens faced low pay. To deal with this, workers from both eras fought unfair labor practices by creating unions and strikes. During the Progressive Era employers soon realized better paid workers are better able to afford the products they were selling. Henry Ford was one of the first employers to realize this, in result he raised the pay of worker to an average of $5 per day. This resulted in Ford’s annual input increasing from 34,000 cars to 730,000 cars from 1910 to

    Read More

  • What Work in Canada Will Look Like in the Future?

    1847 Words  | 4 Pages

    In many nations, the relationship between labor and production has often been a tense one. On one side of the equation, businesses have insisted on greater productivity at lower costs. On the other side, labor (most often in the form of labor unions) has insisted that increased productivity can be best be achieved if the workers have a reasonable “living” wage and job security (Howard 2002).

    Read More

  • Lincoln Electric Company

    1203 Words  | 3 Pages

    When new competitors enter the market, they will have high costs of production due to the lack of economies of scale.... ... middle of paper ... ... The employees’ earnings and promotions were determined in direct proportion to their individual compensation towards the company’s success.

    Read More

  • The Debate Over Minimum Wage

    7668 Words  | 16 Pages

    America of the 1990's is a country of increasing disparity, where the wealthy are moving ahead while the working class is falling behind. In this economic phenomenon, the middle class is disappearing. One of our major defenses to ensure those in the working class receives a fair wage, is legislation providing for one. While many opponents of minimum wage cite labor supply and demand concerns with a legislated wage, we must look at the facts instead of the mere theory.

    Read More

  • Case Study Of Bill Bailey's Theory

    1970 Words  | 4 Pages

    Bill Bailey should base his decision by keeping in mind Stacey Adams’ Equity Theory of Motivation. This theory explains how motivation is affected by people’s perception think they are treated by management. If an employee perceives him/her inequitably underpaid (outputs), relative to others with similar qualifications such as education or work experience (inputs), their motivation will suffer and their performance could decrease so as to eliminate perceived inequities (Schermerhorn, 2011).

    Read More

  • Sociology of the Workplace

    917 Words  | 2 Pages

    The structural-functional analysis of jobs in the U.S. is governed by the workforce stratification and technology. The more educated and diverse a society is the better society’s job market is served. This social economic separation of class has been both good and bad for society. Many workers at the lower levels of employment are both pleased and displeased with many aspects of work. Though this fact also holds true with most any job at any level, pay scale often compensates for endurance of a particular job type. The security of a person’s job also is an issue that in today’s economic times forces one to be prepared for change. This is to say that even if one’s field of expertise is needed today it may not be tomorrow. This type of ever-changing job market leads many to believe that another socio-economic change may occur at any time. This change was apparent with the transition into the industrial age and again in the information age. These concerns caused stress, various health issues, a...

    Read More

  • Women Equal Pay Essay

    466 Words  | 1 Pages

    The workforce should be paid according to their level of ability and not on the basis of gender. A more righteous way in determining wage pay is through education, experience, and ability. The society needs to end male entitlement for this generation is now living in equal opportunity and civil rights. In this way, employers may be able to motivate the best qualified workers to work in their appropriate

    Read More

  • Challenges Faced By Manager At Automotive Industry

    727 Words  | 2 Pages

    The American auto industry has driven the American economy for quite a while. This industry has shaped our progression, and affected American culture and social mores. In no time, caught by globalization and other overpowering variables, it stands up to a troublesome reality. The automotive industries basically influenced the lives of Americans. Chrysler, Ford, and General Motors were American establishments. They are credited for an essential rate of all American livelihoods; they put different hands on families into the professional class, and helped America form into the goliath of the twentieth century, in terms of quality they put all the efforts to reach customer satisfaction. Appallingly, the well-known auto firms are not what they once were and are going down a precarious way. The thickness of its condition has created to a vast issue. From a forceful remote work force, to a strange outside trade technique, issues have developed on a tremendous reach.

    Read More

More about Two-Tier Wages

Open Document