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What challenges do two-tier wage plans pose to the future of unions in the automobile industry?...

What challenges do two-tier wage plans pose to the future of unions in the automobile industry? Do they give unions more or less reasons for existence?

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Answer #1

The basic fundamental on which a union works is to provide equal wages to all. So, with the advent of differential wage through two-tier wage system, the fundamental existence of unions gets questioned.

The US automobile industry has embraced the two-tier wage system as a measure of cost effectiveness and to keep the overall business cost of the company low. So, when there is a wage differential in the industry, what is the advantage of getting registered with the union. The whole existence of unions becomes questionable with the incorporation of two-tier wage system in the automobile industry.

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