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Two-Tier Wage Structures

Will the two-tier wage structure go away in the near future? Summarize the pressures to eliminate it as well as the pressures to keep it. Be sure to consider labor costs and productivity of workers and plants at others companies and in other parts of the world. You may wish to do some research on the new Volkswagen plant in Chattanooga, Tennessee. Also, consider that the Automotive News estimates that the ford Fiesta (a competitor to the Chevy Sonic) plant in Cuautitlan, Mexico may have labor costs as low as $150 per vehicle.

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Two tier wage systems have some advantages, good, and some minor disadvantages. The disadvantages first, are they lower the wages for hiring and this could cost a company key employees or viable personnel to train and promote. People go where the money is and it is easy to discover that the wages for one group are different for another. Often, wages take a long time to balance out, so people do not consider it fair to be paid a lower wage for the same, equal work. It also does not help union officials much. While they can understand and promote the two-wage system, they also must protect that the system does not creep into the current wages of already on-staff ...

Solution Summary

This solution discusses the advantages and disadvantages of two tier wage structure.