More handpicked essays just for you.
Two tier wage system pros and cons
Impact of the american automobiles industry
Impact of the american automobiles industry
Don’t take our word for it - see why 10 million students trust us with their essay needs.
Our company believed that our new contract with the United Automobile Workers would become successful; surprisingly, we discovered Thursday morning that our deal came to no avail . UAW president Dennis Williams did attempt to negotiate with us in a deal calling for higher wages for workers and a 3,000 dollar signing bonus for each new employee. However, the proposed deal failed to explicitly state anything regarding to ending the controversial two-tier wage system implemented at Fiat Chrysler Automobiles. Instead, only modifications to the wage system were mentioned. The voting revealed Thursday showed that 65% of workers voted against the contract . A large fraction of workers against our contract could be detrimental for us, and failing to renegotiate with UAW could lead to potential union strikes. Therefore, I propose that we revise our contract that not only gives adequate wages to workers but also ends the two-tier wage system. A new system should feature higher wage raises for novice workers depending on their productivity until their salaries match those of veteran workers.
The system was adopted by Fiat Chrysler in 2007 due to the struggling automobile market that took place in North America . According to the system, workers who joined the organization after 2007 would
…show more content…
be paid up to 25.35 dollars per hour. Workers who had been with the company before 2007 would be paid up to 30.00 dollars per hour . What is problematic, however, is that up to 45 percent of workers were hired after 2007 and therefore considered entry-level workers . As a result, a large majority of workers resent the wage system due to the 5 dollar income gap seen between veteran workers and entry-level workers. The problem is, both veteran and entry-level workers have similar jobs in the factories and the experience needed between different jobs is minimal. In fact, our CEO Sergio Marchionne reported last July to the Associated Press that it was necessary for the organization “to design a career path for people who come into our business” . It has been 3 months since and there is still no sign for a deal between the UAW and Fiat Chrysler that could end the two-tier wage system. As bad as the system could be for entry-level workers, it could also negatively affect Fiat Chrysler in a variety of ways. • There could be a risk for a union strike: If the two-tier wage system is not abolished, then workers, especially at the entry-level, could decide to avoid working in favor of participating in a union strike. It would not be the first time that UAW has ever done this. UAW had set up a strike 17 years ago at General Motors costing the company 500,000 vehicles and a net loss of 2.8 billion . In fact, Ford Motors is currently at risk of facing a strike by UAW for failing to report issues at a power plant about safety provisions . • The supply for cars could drop: If a strike were to be set up against us, we could definitely be facing losses for car supply. With fewer employees present, auto production would naturally decrease. Depending on how big a strike could be, it would be very difficult for us to replace our losses. Economist Gregory Mankiew has stated in his book The Principles of Microeconomics that as long as demand stays the same, the decrease of supply could result in higher prices for customers. In other words, a strike big enough to result in heavy losses for our company could drive up prices for our automobiles . This makes it more likely for our customers to search for other companies when purchasing a car. Thus, these outcomes could result in lower net profits for us. Instead of keeping a two-tier wage system, we should use a system where all entry-level workers would gradually have raised salaries through productivity and time spent at Fiat Chrysler.
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
could 1. Attract more workers: This proposed system could attract automobile workers looking for higher pay in the auto industry. Furthermore, entry-level workers who have been previously paid lower wages than veteran workers could become less likely to leave Fiat Chrysler. This would cause a higher supply for workers. 2. Ensure more production: Higher salaries for work would lead to more workers employed by the company. Due to the increase of the supply of workers, car production would rise. Also, the increase of salaries would give workers the incentive to become more productive for the company. As a result, the supply of auto production would increase, and Fiat Chrysler would receive higher gains in profit. This system may have some negatives, however. An increase of wage raises to employees, for example, would have to mean more deduction of profit for the company. Also, rivals Ford and General Motors could make great deals of their own to UAW regarding salary. However, this gradual wage system should be able to limit income disparity and ensure that all workers are fairly paid based on their productivity and time with us. Thank you for your time for reading this and I hope that you can reach a favorable agreement with UAW.
GMFC is hoping to open a new plant within the United States that would specialize in recreation vehicles. Management would like to open the factory of 500 employees as a nonunion plant but they are worried that the United Automobile Workers (UAW) and other unions will attempt to unionize. There are many benefits to keeping the plant union-free such as, higher profits, flexible policies to better serve employees, and higher productivity. This paper will look at specific recommendations GMFC can do to prevent unionization at the new plant and still be competitive in the industry.
The case study of GMFC provides an example of a company attempting to avoid unionization of its workers. GMFC is expanding by building a new U.S. plant which will manufacture motorized recreational equipment. The company plans to hire about 500 production workers to assemble mechanical components, fabricate fiberglass body parts, and assemble the final products. In order to avoid the expected union campaign by the United Automobile Workers (UAW) to organize its workers, GMFC must implement specific strategies to keep the new plant union-free. GMFC’s planning committee offers suggestions with regards to the plant’s size, location, staffing, wages and benefits, and other employee relations issues in order to defend the company against the negative effects of unionization and increase...
Tensions between union supporters and management began mounting in the years preceding the strike. In April of 1994, the International Union led a three-week strike against major tracking companies in the freight hauling industry in attempts to stop management from creating $9 per hour part-time positions. This would only foreshadow battles to come between management and union. Later, in 1995, teamsters mounted an unprecedented national union campaign in attempts to defeat the labor-management “cooperation” scheme that UPS management tried to establish in order to weaken the union before contract talks (Witt, Wilson). This strike was distinguished from other strikes of recent years in that it was an offensive strike, not a defensive one. It was a struggle in which the union was prepared, fought over issues which it defined, and one which relied overwhelmingly on the efforts of the members themselves (http://www.igc.org/dbacon/Strikes/07ups.htm).
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
To resolve the gender wage gap, the government should consult with employers in federally-regulated sectors to apply a gender-based analysis to the design, development, implementation and evaluation of the policy. The law should clearly outline the systematic discrimination that women face in the workforce. This policy would entail employers to determine whether gender-based disparities exists and reevaluate the current pay system from an equity perspective to ensure and promote pay transparency. The law of ensuring pay equity should first be applied to the public sector, including federal public servants, employees of Crown cooperation and federally regulated companies. After this law has been found to be effective, it is also recommended that private corporations follow the same suit and comply with the pay equity
GM and UAW seem to be playing a dangerous game that can destroy many people’s lively hood. GM is hurting financially and instead of asking for help from the UAW, GM prefer to threaten them about health care costs. GM chairman, G. Richard Wagoner Jr., said recently that he prefers to collaborate with the UAW on health care issues rather than a fight. Mr. Wagoner stated that he would press the issues for health care cost cuts with or without the union’s approval. It is crystal clear that we need to achieve a significant reduction in the health care cost disadvantage and it needs to be done now (Welch, 2005).
To conclude this analysis on the basis of the labor’s extensive history, Sloane & Witney (2010) propose, “it is entirely possible that labor’s remarkable staying power has been because of the simple fact that to many workers, from the nineteenth century to the present, there really has been no acceptable substitute for collective bargaining as a means of maintaining and improving employment conditions” (p.80). In the end, it is important to anticipate unions and employers presently work together to find solutions that will enhance collective bargaining strategies and practices to serve the interest of both parties.
Organizations face massive challenges in attracting and retaining a high-quality and productive workforce. Companies are continually looking for new ways to keep their employees satisfied at all levels in order to harness greater productivity and ideas from people while keeping them motivated and happy. One real challenge examined earlier is the need to transform General Motors to be a much more productive and fully utilized organization by examining the hourly workforce. This is a great change from the traditional "us versus them" mentality of the past between management and the union.
Fast-food workers have been protesting for a minimum wage of $15 dollars an hour and the freedom to unionize. The workers have organized numerous protests this year. During the protests they have walked out and chanted slogans regarding their pay. The main fast-food companies that are effected is McDonald's and Burger King. They both have stated that they will not press charges and indeed are allowing the workers to return. These workers that are participating in the strike doesn’t represent the majority of the fast-food employees. The people participating in the strike are not only youths but adults and elders as well. Due to the countries low employment rate many of these workers are supporting a family or other dependents. This is where most of the fast-food workers are getting their motivation to protest this industry. Unfortunately, many Americans are questioning the negative economic effects of their proposed wage and their lack of worthiness to receive that big of a pay raise. However, I believe that with some adjustment and research we can find a way to make everyone happy. My solution advises that we support Obama’s nine dollars an hour minimum wage proposal. It will give the fast-food workers financial support, release the burden of the taxpayer’s assistance, and keep inflation balanced.
Throughout American history, labor unions have served to facilitate mediation between workers and employers. Workers seek to negotiate with employers for more control over their labor and its fruits. “A labor union can best be defined as an organization that exists for the purpose of representing its members to their employers regarding wages and terms and conditions of employment” (Hunter). Labor unions’ principal objectives are to increase wages, shorten work days, achieve greater benefits, and improve working conditions. Despite these goals, the early years of union formation were characterized by difficulties (Hunter).
Nowadays, most women remain unaware that their employers underpay them. Women cannot argue for higher wages if they do not know they earn less than their male equivalents. Each employee sharing their salary will allow women to detect if they are earning less than their male colleagues with little difficulty. This will give women the tools needed to argue for a higher pay rate, and will help lower the wage gap. If a female worker goes to her boss with statistical evidence that she earns less than her male associates, the chances that her boss will award her a higher salary significantly increase. The law will make it almost impossible for companies to pay their male workers more than their female workers (Glynn para. 7). Furthermore, a law requiring employees to share their salaries will bring to light other forms of wage discrimination. The wage gap not only represents gender discrimination in the workplace, it also reflects the ongoing issue of racial discrimination. While white women do typically earn less than white men, they out earn the majority of female colored workers in America. The average African American female makes only 64 cents for the white man’s dollar. Additionally, Hispanic women receive only 54 cents to their white male coworker’s dollar (Hegewisch para. 9). If women of color become aware of how little they earn compared to
Pay equity programs attempt to address the undervaluation for work traditionally or historically done by women. Pay equity (also referred to as “comparable worth”) programs require a gender-neutral analysis of comparative work. A variety of very different jobs are compared based on a composite of the skill, effort and responsibility of a job and the conditions under which the job is generally done. The comparison determines the relative worth of those jobs to the achievement of a firm’s objectives, under the proposition that equal contribution merits equal compensation. Where female-dominated jobs in the workplace are found to be of equal or comparable value to male-dominated jobs but paid below the level of the male jobs or payline, then all employees in those female-dominated jobs are entitled to receive pay equity adjustments.
The Clinton Administration served notice in 1993 that it intended to seek an increase in the federal minimum wage. Liberal politicians applauded the new president, agreeing that an increase was overdue and deserved. However, their conservative counterparts lamented the policy proposal, fearful that a minimum wage hike would further unsettle the economic recovery that was underway at the time. Both liberals and conservatives began to marshal their statistical forces to support the long held claims concerning the positive and negative consequences of a minimum wage increase. Since then, political rhetoric has often ruled the minimum wage debate. (Mckenzie, 10, 1994)
Launched to great fanfare by the Labour Movement in mid-2012, the Progressive Wage Model (PWM) was introduced to help low-wage workers attain progressive and sustainable wages proportionate to their productivity levels and skills. National Trade Union Congress Secretary General Lim Swee Say believes that it can “help our low-wage workers receive more decent starting wages and more importantly, to create a ladder for them to move up in terms of skills, productivity and jobs” . The PWM takes the form of a traversable wage ladder, promising wage progression as one rises up the rungs of his industry. It establishes that with constant upgrading, productivity can be increased, translating to better commensurate wages and quality of
The laws and regulations surrounding Industrial Relations since the 1900’s have, at each reform, placed tighter constraints on the amount of power unions are able to exert. The reforms have also radically increased managerial prerogative, through an increased use of individual bargaining, contracts and restrictions imposed on unions (Bray and Waring, 2006). Bray and W...