What is the “two tier wage system” that fuels workers’ strikes?

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In increasing numbers, workers across the country are taking a stand and demanding better conditions, benefits and wages from their employers. While their workplaces vary, from Nabisco and Kellogg to John Deere to Kaiser Permanente, employees are united by at least one of their grievances: opposition to a two-tier benefits and wage system.

The policy, which is often adopted by companies as a means of reducing costs, creates two different compensation and benefit structures for current and future employees. During the term of a given contract, existing workers have acquired rights and guarantee certain benefits and rates of pay, while future employees are hired at a lower rate of pay and often receive fewer or worse benefits.

Existing workers oppose the policy for several reasons, not least because it creates disparities between workers doing the exact same job and essentially penalizes those who join the company later, which can hurt morale, create negative feelings. animosity and result in high turnover.

“These future workers are like unborn babies,” said David Woods, international secretary-treasurer of the International Bakery, Confectionery, Tobacco and Grain Millers Union, or BCTGM. “They don’t have a face or a name yet, but we know they’re following us. Companies want to remove future employees and that is not acceptable.

A two-tiered pay or benefits system can also reduce union power, as new hires may be less inclined to join, resulting in a decline in union membership and a division of the workforce. For existing workers, there is also the fear that the adoption of such a system could impact their future contracts, which could be subject to the conditions of the lower level.

While these two-tier systems aren’t new, they certainly come at a time when workers across industries are actively resisting them.

“Employers do them in waves because they tend to lead to low morale and if you institute them over and over again they cause more problems,” said Kate Bronfenbrenner, director of workplace education research. at Cornell University’s School of Industrial and Labor Relations. “We see them every time there is an economic crisis. There was a big push for them in the 80s and then a surge in the 90s and now we’re seeing them again. It seems contagious. “

Bronfenbrenner said these systems not only create frustration and tension, but can also lead to productivity and safety issues. She said it also doesn’t make sense to implement these systems when there are labor shortages like those currently seen in low-wage jobs and healthcare. .

In early October, workers at Kaiser Permanente voted to allow a strike over dissatisfaction with working conditions and the possibility of a two-tier system as they continue to fight the pandemic.

“Companies are boasting record profits, while workers are working record hours. “

“While we save the world, they are planning our demise, it seems,” said Kim Mullen, a nurse at Kaiser South Bay in Los Angeles and a union official who helped organize the strike vote. “It’s so insulting after everything we’ve done that they’re manipulative.”

Kaiser insists that changes are necessary to maintain existing standards of care and affordability.

“[W]We offer a market-based compensation structure for employees hired in 2023 and beyond that will allow our new employees to be paid above market wages on average, receive the same great benefits and keep going. to attract and retain top talent, ”said Arlene Peasnall, senior vice president of human resources at Kaiser Permanente, in a statement.

The two tier system is an attempt to break up the union and create discord among workers, said Jane Carter, research director for United Nurses Associations of California / Union of Health Care Professionals, or UNAC / UHCP.

“It cannot be assumed that their real intention is to cut wages and not costs,” Carter said. “I don’t understand how employers and business leaders can come up with these proposals and expect to keep the current workforce they have, let alone recruit future hires, especially when there is a shortage. labor.”

These are common themes within the ongoing worker unrest, according to Woods, the international secretary-treasurer of the BCTGM, which represents workers at Nabisco and Kellogg.

“There is anger at not being appreciated during the pandemic,” Woods said. “Companies are boasting record profits, while workers are working record hours. “

In September, workers at Nabisco ended a weeklong strike after successfully opposing several proposed changes, including a two-tier benefit system that would have provided lower-quality health care benefits but dearer to new recruits. Neither Nabisco nor its parent company, Mondelez International, responded to a request for comment.

Kellogg and John Deere workers are currently on strike to oppose several issues, including two-tier wage and benefit systems.

John Deere did not respond to an NBC News request for comment.

At Kellogg, workers granted a one-time concession in 2015, granting the company the option of temporarily instituting a two-tier system with strict caps for the number of workers that could be considered transitional from the old one. Now the workers say Kellogg wants to make this concession permanent, which they don’t want to do. Kellogg disagrees.

“The union agreed to a two tier system in 2015 to help deal with rising labor costs, which were out of sync with the market and the rest of our network,” the door said. – Kellogg’s speech, Kris Bahner, in a statement. “We paid a signing bonus of $ 15,000 to each hourly grain worker in exchange for these changes. Now the union wants to go back on this agreement.

Kevin Bradshaw, a Kellogg worker and vice president of Local 252G in Memphis, Tennessee, said accepting such a system permanently would be selling off future colleagues, and being asked to do so is sad , especially with all the sacrifices workers made during the pandemic.

“If you are not equal in pay, you are not equal,” said Kevin Bradshaw, a Kellogg worker and vice president of Local 252G in Memphis, Tenn. “We are fighting corporate greed because none of the companies calling for a two tier system really need it, they just want it. The time is up to give companies big concessions, settle for certain things and not not retaliate. ”


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