Jump to content
House Price Crash Forum
Sign in to follow this  
interestrateripoff

Unions Yield On Two-Tier Wage Scales To Preserve Jobs U. S.

Recommended Posts

http://www.nytimes.com/2010/11/20/business/20wages.html?ref=business

MILWAUKEE — Organized labor appears to be losing an important battle in the Great Recession.

Even at manufacturing companies that are profitable, union workers are reluctantly agreeing to tiered contracts that create two levels of pay.

In years past, two-tiered systems were used to drive down costs in hard times, but mainly at companies already in trouble. And those arrangements, at the insistence of the unions, were designed, in most cases, to expire in a few years.

Now, the managers of some marquee companies are aiming to make this concession permanent. If they are successful, their contracts could become blueprints for other companies in other cities, extending a wage system that would be a startling retreat for labor.

Though union officials said they could not readily supply data on the practice, managers have been trying to achieve this for 30 years, with limited results. The recent auto crisis brought a two-tier system to General Motors and Chrysler. Delphi, the big parts maker, also has one now. Caterpillar, back in 2006, signed such a contract with the United Automobile Workers.

The arrangement was a fairly common means of shrinking labor costs in the recession of the early 1980s. At the end of the contracts, however, wages generally snapped back up to a single tier. At G.M., Chrysler, Delphi and Caterpillar, the wages will not be snapping back.

Nor will that happen for workers at three big manufacturers here in southeastern Wisconsin — where 15 percent of the work force is in manufacturing, a bigger proportion than any other state. These employers — Harley-Davidson, Mercury Marine and Kohler — have all but succeeded in the last year or so in erecting two-tier systems that could last well into a recovery.

“This is absolutely a surrender for labor,” said Mike Masik Sr., the union leader at Harley-Davidson, the motorcycle maker, not even trying to paper over the defeat. His union recently accepted a new contract that freezes wages for existing workers for most of its seven years, lowers pay for new hires, dilutes benefits and brings temporary workers to the assembly line at even lower pay and no benefits whenever there is a rise in demand for Harley’s roaring bikes.

When the proposal was put to a vote recently, Harley’s blue-collar employees, most of whom belong to the powerful United Steelworkers, approved it by a decisive 53 percent to 47 percent.

Just up the highway, Mercury Marine, which makes outboard motors and marine engines, has a similar agreement with its factory workers. And the Kohler Company, another manufacturing giant in southeastern Wisconsin, famed for its gleaming bathroom fixtures, is negotiating a contract using Harley’s pact as a template and, so far, getting much of its way.

“The simple economic fact is that we overproduced and now we have to burn off the excess,” Matthew S. Levatich, president and chief operating officer of Harley-Davidson, said in an interview, speaking in effect for all three manufacturers. “You could say,” he added, “that the new contract is a recognition of this truth on the part of our workers.”

Nowhere else in the country has quite so tough a contract emerged at companies that are profitable, the A.F.L.-C.I.O. says.

“Management clearly has the upper hand in negotiations because of the employment situation,” Milwaukee’s mayor, Tom Barrett, said.

More at the link.

Interesting there is also a potentially big negative effect in the wider economy if this happens, house prices in the US won't recover. If large numbers of new workers are being paid less they are ultimately going to have less disposable income to spend in the wider economy and will be able to borrow less.

This ultimately seems a very deflationary move.

However it could prove very divisive I certainly wouldn't be very impressed doing the same job as someone next to me who could be earning say 100% more than me for doing exactly the same thing. In a genuine recovery I could see this destroying morale.

Share this post


Link to post
Share on other sites

http://www.nytimes.c...ml?ref=business

More at the link.

Interesting there is also a potentially big negative effect in the wider economy if this happens, house prices in the US won't recover. If large numbers of new workers are being paid less they are ultimately going to have less disposable income to spend in the wider economy and will be able to borrow less.

This ultimately seems a very deflationary move.

However it could prove very divisive I certainly wouldn't be very impressed doing the same job as someone next to me who could be earning say 100% more than me for doing exactly the same thing. In a genuine recovery I could see this destroying morale.

happens all the time in our public sector...pay scales.

Share this post


Link to post
Share on other sites

http://www.nytimes.com/2010/11/20/business/20wages.html?ref=business

More at the link.

Interesting there is also a potentially big negative effect in the wider economy if this happens, house prices in the US won't recover. If large numbers of new workers are being paid less they are ultimately going to have less disposable income to spend in the wider economy and will be able to borrow less.

This ultimately seems a very deflationary move.

However it could prove very divisive I certainly wouldn't be very impressed doing the same job as someone next to me who could be earning say 100% more than me for doing exactly the same thing. In a genuine recovery I could see this destroying morale.

It not exactly new,Women have had to put up with that sht for decades. Perhaps they should send the Harperson over there to sort it out

Share this post


Link to post
Share on other sites

Epic fail. In an era of low demand and endless surplus labour, unions are basically powerless. And the ability of workers to negotiate higher income, unless they have some exceptional skill, which most likely those ones go into business for self anyway.

Its not a bed of roses for the corporations either.. they are facing falling demand, falling prices, and competitors cutting costs like their labour.

Share this post


Link to post
Share on other sites

Epic fail. In an era of low demand and endless surplus labour, unions are basically powerless. And the ability of workers to negotiate higher income, unless they have some exceptional skill, which most likely those ones go into business for self anyway.

Its not a bed of roses for the corporations either.. they are facing falling demand, falling prices, and competitors cutting costs like their labour.

clearly you dont watch Doomberg or other tout TV channels! Shares are up up up! buy buy buy!

Share this post


Link to post
Share on other sites

So- is this part of the cunning plan to inflate away debt? There seems to be a big disconnect here between Ben' the bankers friend' Bernanke and the reality of wage deflation. All that money printing will surely just accelerate deflation-of discretionary spending- if wages can't respond.

Share this post


Link to post
Share on other sites

So- is this part of the cunning plan to inflate away debt? There seems to be a big disconnect here between Ben' the bankers friend' Bernanke and the reality of wage deflation. All that money printing will surely just accelerate deflation-of discretionary spending- if wages can't respond.

I think Ben is too busy reading text books and creating working theories on paper to be too concerned with reality.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 149 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.