- www.counterpunch.org - https://www.counterpunch.org -

Organized Labor and the Dreaded Two-Tier Contract

From the vantage of organized labor, the worst statutory event ever to occur was passage (over President Truman’s veto) of the 1947 Taft-Hartley Act.  Besides outlawing a union’s ability to conduct secondary strikes and boycotts (in other words, prohibiting workers from freely engaging in a meaningful display of union “solidarity”), Taft-Hartley ushered in the toxic era of the so-called “right-to-work” state.

A right-to-work state is one that allows employees to hire into a union facility—a facility that routinely offers better wages and benefits than a comparable non-union facility—but, preposterously, does not require these employees to join the very union that made those economic advantages possible.  At first blush, such a sleazy, “backdoor” arrangement seems grossly unfair if not downright illegal.

But right-to-work provisions aren’t illegal.  Indeed, they are not only legal, a whopping 28 states (including Michigan and Wisconsin, their illustrious labor histories notwithstanding) have adopted them.  So what has Taft-Hartley wrought?  It has given sharp-eyed pilgrims the right to publicly rejoice in the hard-earned benefits of union membership—including being able to cite the union contract when filing a grievance—without having to become union members.

Not to stretch the analogy, but isn’t this bullshit a bit like the soldier who spent all his time in the motor pool, having never once seen actual battle, and then insisting on being awarded a combat ribbon because a lot of the other guys got one?  While U.S. companies smugly refer to this union-busting device as “freedom of choice,” organized labor calls it “freeloading,” which it clearly is.

As crippling as the Taft-Hartley Act was, one can argue that implementation of the “two-tier wage and benefit configuration” has been equally debilitating.  Unlike the post-war Taft-Hartley, the two-tier didn’t raise its ugly head until the late 1970s, when the UAW (United Auto Workers) was first exposed to it, but since then—in the wake of hundreds and hundreds of corporations having jumped on the bandwagon—it’s done incalculable damage to the labor movement.

Basically, the two-tier arrangement is exactly what it implies.  One pay scale is transformed into two.  Under a two-tier, instead of everyone in a union shop receiving—as was historically always the case—identical pay and identical benefits for doing identical jobs, the company is allowed to create a secondary progression ladder.

And under the provisions of this secondary ladder, all future employees are locked into not only what wages they can make, but what benefits they can receive, including vacation time, pensions, and in some cases, health coverage.  Why on earth would a union agree to such contract language?  Because they had a gun to their heads.  The mighty UAW once had more than a million members.  Today, they’re a shell of their former selves.  Membership stands at 390,000.

Understandably, these two-tier configurations—particularly the most radical versions—didn’t emerge fully formed.  For one thing, in the beginning, most companies weren’t sure where the plans would lead (or how best to sell the idea to the union), and for another, if the union were given the slightest hint at what the most ambitious versions would be, they would have risen en masse, and run away screaming from the bargaining table.

Which is why the first two-tiers were presented as “hiring rates.”  For example, in the West Coast paper industry, local unions agreed to having their new hires paid less than seasoned employees doing the same job, so long as the differential adhered to a graduated index.

During their first three months a new hire would receive 80% of the full rate.  The next three months it would be 85%.  Then 90%.  Then 95%.  Only after one year would they receive the full rate.  No one really objected to this, including the new hires themselves, who thought it was a “fair” system.

But all of this quickly morphed into what we find today:  A permanent and disaffected collection of “haves and have-nots.”  Under a strict two-tier arrangement, today’s new hires can never earn what a senior person earns doing the same job, no matter how long they remain on the payroll.  One can readily imagine what effect this has on union solidarity.  It’s been devastating.