This stinks. Dual wages.

[Whitehouse]

Meet The Half-Priced Auto Workers Building Your New Car

Derick and Justin Jewell are brothers. They both work in GM plants doing similar jobs. The main difference between them? Justin makes $16 an hour. Derick makes $28 an hour. Welcome to the world of "two-tiers."

The American Dream is that each generation will do better than the last. But many families of auto workers no longer have that expectation. As Detroit car makers sped towards financial ruin, their union agreed to a dual wage structure, plus deep cuts in benefits. Now, new hires earn about half what traditional workers make. Changing Gears Ann Arbor reporter Kate Davidson tells how this reversal of fortune has altered their lives.

Read the rest of the story Here.

[[Edit: Topic title corrected)

[n7hn]

Im sure Derik has better benefits and more job security too. Thats happening in all industries, grocery stores, telecommunication jobs, welcome to the new world.

[EastsideAl]

The tiered contract has played a big part in the downfall of organized labor in the U.S. Once management realized that they could play "divide and conquer" even within the unionized workforce itself, and that union leadership would go along with them, putting up only token resistance to giving up their younger members' futures in favor of their older ones, the jig was up.

[Johnlodge]

$16 entry level with no education and union guaranteed pay increases? Poor guy.

[lincoln8740]

$16 entry level with no education and union guaranteed pay increases? Poor guy.

Beat me to it--Damn!!!

[rb336]

33K/yr + benefits ain't horrible

[maxx]

It's considerably below the median income for the U.S. which is around 50k.

[Farrer]

Isn't this happening in public education, too?

[n7hn]

Everywhere.

[fryar]

It's considerably below the median income for the U.S. which is around 50k.

Is it that high? Ten years ago or so, the average full-time salary was about $38k or so. Which is different from median household income, of course, since the household often includes a spouse, and maybe children. My recollections are all very vague, of course, as my advanced age is showing itself ;-). But all the comments above are true. And as we know from the And so it begins... thread, income in the area has not necessarily held steady.

It's not the American Dream par excellence, but throw in some overtime [[which is iffy, possibly), and he might be looking at $50k. If the wife works, too, he is still the envy of a lot of folks out there, especially in the area.

It's a totally legitimate observation relating to times having changed, of course.

[n7hn]

and factor in the cost of living is less than many places too. Say $800 a month for housing.... in cali thats a garage apt w no kitchen

[cman710]

It's considerably below the median income for the U.S. which is around 50k.

In 2008, the U.S. median income was around $52K. Considering that auto assembly jobs are ones that require relatively little education, and that there is a huge pool of people who could do the job, I think it would be unrealistic to expect those workers to be making $50K a year.

That said, I do feel sorry for people who have been individually affected by these changes. It must be awful to see someone doing the same thing you are but making so much more money.

[gazhekwe]

The son started at the same rate of pay as the mom did 24 years ago. Well, she has been there 24 years and of course is making more than he is. He just started. When I first started working at an insurance company, I made half as much as the people who had been there several years. Three years later, the starting wage had surpassed both mine and the ten year employees' wages, and we had been getting annual raises. Several of the more long term workers tried to work it out but management was adamant, and they quit. They were picked up by a major agency at starting wages higher than what they had been making at the company. Inflation has its downsides as does deflation. This is deflation, of course. Home prices, interest rates, wages. Lets hope consumer goods start coming down or no one will be able to buy anything.

[fryar]

In 2008, the U.S. median income was around $52K.

I'm berating the point, of course, but you probably mean median household income. Wikipedia puts that figure at $50,223 for 2007, so I imagine you are. Wikipedia also points out that "personal income has remained relatively stagnant over the past few decades, [[but) household income has risen due to the rising percentage of households with two or more income earners."

I understand that this is being compared to some hey-day of manufacturing where you made $75k+ and had awesome benefits, and that was not a bad thing, but in fairness, the guy making $16/hr is basically right on par. If his wife is out there making $10/hr in the retail sector, that is - but that, too, would be right on par.

[EMG]

So, as the downturn continues, the options will be to either:

1. Cut Derick's wages to $16 -or-

2. Lay him off and move his job overseas.

Like it or not, the days of union clout are long gone.

[ghettopalmetto]

It's considerably below the median income for the U.S. which is around 50k.

And it's also what your typical college graduate makes coming out of school.

That median income figure is for "household" income, which these days, typically consists of at least two incomes.

[Cincinnati_Kid]

So, as the downturn continues, the options will be to either:

1. Cut Derick's wages to $16 -or-

2. Lay him off and move his job overseas.

Like it or not, the days of union clout are long gone.

Number 1 is a distinct possibility during the 2011 contract talks. You can look for the auto companies to really drop the hammer on wages. They will try further to get rid of the senior workers making the top rate, so they can flood the plants with 2 tiers. That's why most that were going to retire did so within the past 4 years, if your pay rate is cut, your pension will be based on that rate which means a smaller pension. It's inevitable, and the union is going to go along with it.

[Cincinnati_Kid]

And it's also what your typical college graduate makes coming out of school.

That median income figure is for "household" income, which these days, typically consists of at least two incomes.

If they can find a job. Most have to take jobs, they are over qualified for, just to get a jump on paying back those thousands and thousands of dollars borrowed for student loans. Makes you wonder is it really worth it?

[MCP-001]

Thank the UAW for that. They signed off on it.

[Johnlodge]

It's considerably below the median income for the U.S. which is around 50k.

What does the median income of the U.S. have to do with an uneducated kid's entry level wage?

[johnsmith]

What does the median income of the U.S. have to do with an uneducated kid's entry level wage?

That's exactly what I was thinking. Maybe in 15-20 years he'll be up to the median wage level when he's in the median of his career.

[DTWflyer]

I know a lot of 24 years old with college degrees that are in professional jobs that make only about $30K/year.

Most of the 24-28 year olds I know earn way less than the median household income.

I also know many of 24 year olds that make $50-$70K a year in professional jobs with college degrees, but usually put in 60+ hours a week to get their work done.

I don't have a whole lot of symphathy.

[gazhekwe]

It is hard to see why a newbie should be making as much as a career professional. There is a lot of on the job training involved that the newbie just has to put in the time to learn. Newbies generally rely on career types to help them out until they get in the know. So, they get lower pay to begin with, yes.

[EastsideAl]

But the point here is that, given the increasingly common 2-tiered contract, his wage will most likely ALWAYS be lower than what his brother makes.

It's an abomination and a serious black mark on American union leadership that they've allowed, and even encouraged, this to happen. No wonder we're seeing a declining standard of living in this area, and increasingly throughout the country. Those who once set the standard for what the labor and lives of workers was worth, a standard that eventually worked to allow greater bargaining power and better wages for even non-union workers further down the supply chain, have given away their long-term power in the furtherance of the short-term interests of a limited portion of their membership.

[1KielsonDrive]

The tiered contract has played a big part in the downfall of organized labor in the U.S. Once management realized that they could play "divide and conquer" even within the unionized workforce itself, and that union leadership would go along with them, putting up only token resistance to giving up their younger members' futures in favor of their older ones, the jig was up.

Which, of course, 'divide and conquer' has been going on for as long as the labor movement and centuries more. This is another one of the 'Win - Wins' for corporations and the richest people in the world as a result of the economic meltdown orchestrated by those same people with little or no sacrifice and responsibility on their part. Other than, of course, maybe some paper losses.