An issue related to the impact of unions on the structure of wages is the evolution of two-tier pay structures plans, which are pay structures that distinguish wages based upon traditional benefit structures.
A two-tier system is a type of payroll system in which one group of workers receives lower wages and/or employee benefits than another.
Such two-tier wage systems are often economically attractive to both employers and unions. Employers see immediate reductions in the cost of hiring new workers. Existing union members see no wage reduction, and the number of new union members with lower wages is a substantial minority within the union and so is too small to prevent ratification. Unions also find two-tier wage systems attractive because they encourage the employer to hire more workers.
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