Source: Ken Jacobs, New Labor Forum, Vol. 18 no. 1, Winter 2009
Since their inception, two-tier contracts have been associated with increased employee turnover, lower employee morale, and reduced productivity. Nevertheless, they have continued to persist as a form of concessionary bargaining. The Bureau of National Affairs (BNA) reported that 8 percent of employers who responded to their 2008 collective bargaining survey had expiring contracts with permanent two-tier compensation systems, while another 20 percent reported temporary provisions.
This article will explore the history of two-tier contracts, examine how the labor movement has responded, and end with a discussion of what unions can do to address the challenges that two-tier contracts pose.