Thousands of John Deere workers have been on strike for more than a month. Nearly 1,500 Kellogg’s workers likely will celebrate Thanksgiving on the picket line. More than 30,000 Kaiser Permanente workers narrowly avoided a strike this week through an 11th-hour deal with management.
The common thread? Tiered wage proposals that help companies cut costs but that unions say cheat new workers out of pay and retirement benefits.
At John Deere and Kaiser, organized labor prevailed in stripping tiered wage systems from the proposals during collective bargaining sessions—a big victory, but one that required each union to flex the nuclear threat of a strike.
As the name suggests, tiered wage systems create separate pay and benefit tracks depending on when an employee is hired. It’s used almost exclusively in union workplaces, where employers must negotiate over pay and benefits; in non-union shops, employers can make such changes unilaterally.
For instance, a two-tier collective bargaining agreement could give current employees a minimum of $25 an hour, a $2 annual raise for the next four years, and a guaranteed pension. But workers hired after a certain date in the future would only get $20 an hour, a $1 raise each year, and a less-lucrative 401(k) savings for retirement.
Employers favor tiered systems as a cost-cutting measure. Phasing out costly pensions and suppressing wages for new hires without taking away benefits from current workers can...
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