Auto Workers on strike want a raise in pay. They also desire greater pay equity.
Eliminating tiered remuneration at the Big Three American automakers, General Motors, Ford, and Chrysler-maker Stellantis, is one of the top priorities of the United Auto Workers, which went on strike at three sites early on Friday.
The union claims that because of the agreements, many employees must climb the wage and benefit ladder more gradually than some of their coworkers.
The demand to stop the practice is similar to one that UPS employees won at the largest package delivery company in the country last summer, raising hopes that the UAW effort may lead to opposition to staggered compensation elsewhere.
A fresh recruit can eventually reach the salary level of a veteran employee under the UAW’s 2019 contracts, which expired on Friday, but doing so takes eight years.
And on a particular Big Three assembly line, a temp earning $18 per hour might be working side by side with an entry-level hire making $22 per hour or a long-term employee getting $32 per hour, in large part depending on whose labor agreement was in effect at the time each person was hired.
Read Also: 10 Ways to Save Money After Retirement
Automakers and Union Clash over Tiered Pay System
The dismantled pay system at UPS was criticized for creating second-class positions at the company, where some employees earned less than those with fewer responsibilities
Union leaders have also called attention to the Big Three’s continued use of subsystem workers, a category that increasingly includes people hired through joint ventures for the production of electric vehicles and who are frequently exempt from union protections, resulting in the creation of even more pay and benefit categories.
The conditions governing employee compensation and benefits have changed from one contract to the next, so it is unclear how labor and automotive executives define tiers.
The businesses contend that flexibility is necessary to control labor costs and maintain competitiveness during the EV transition, particularly in light of nonunion competitors that offer lower wages to many of their workers.
The automakers may also be aiming to maintain a tool for attracting and keeping personnel, according to David Whiston, a Morningstar analyst who focuses on the Big Three.
Some business insiders believe that the key point of contention is how long a person should be in a position to advance.