In most of his 32-year career as a Michigan autoworker and union leader, Frank Hammer never imagined the United Auto Workers agreeing to major concessions when it came to core principles: equal pay for equal work, job security and generous pensions.
But an erosion of those key values has arrived and at a rapid pace over the past several years: Enter a two-tiered salary system. Beginning in 2007, the UAW has drafted contracts with the Detroit Three automakers aimed at rebuilding a struggling American auto industry and preventing thousands of American jobs from moving overseas. One of the key changes in the contracts allowed for a two-tiered salary system, letting entry-level workers earn far less than traditional workers while also forgoing pensions and more generous health plans.
As a result, roughly 13 percent of General Motors Co., Ford Motor Co. and Chrysler Group hourly workers, or about 15,000 employees, are now in those lower-paid positions, shows a recent study from the Center for Automotive Research in Ann Arbor, Michigan.
Before the UAW agreed to the new salary structure, the average worker cost GM about $79 per hour in wages and benefits. Today, that figure is down to $58, largely because of the growing number of entry-level positions coming into the system, says Kristin Dziczek, a director at the Center for Automotive Research. Typical entry -level workers earn about $19 per hour, with workers in warehousing and distribution positions making less than $15 per hour, she says.
The new salary structure has taken a toll on all autoworkers, undermining the ability of workers to live a decent wage and quality of life, says Hammer, who retired in 2006 and is now a leader of The Autoworker Caravan, a Michigan-based advocacy group formed in 2008 for unionized autoworkers.
"The morale of workers in the plants is not at all what it used to be," Hammer says. "You face situations where a mother and son can be working on two different sides of the assembly line doing the same job, but one is working at half the wage of the other."
But Dziczek says many new autoworkers are happy to take the jobs, even at drastically lower salaries, because the depressed job market offers them few other opportunities.
"Traditional workers really feel these [new] people have gotten a raw deal," she says, "but entry-level workers are looking at it differently, figuring, 'If I stick around long enough, I'll get the wage you got.' They understand the bargain."
GM spokesman Bill Grotz says the contract negotiated in 2007 has resulted in about 9 percent of the automaker's current workforce being entry level, and it's working well. "Overall, it was a pretty innovative labor agreement. ... It helped us stay competitive, open more plants and provide more opportunities for more jobs," he says.
Two-Tiered Pay Scale for Autoworkers Raises Debate - Featured Article - Workforce
