With a desperate need for job creation in mind, two industries have put into effect a two-tier wage system to enable them to hire more workers. Interestingly enough, the two comparable systems are exhibited in vastly different arenas — law firms and auto manufacturers.
What is the common denominator between these two industries that has caused them to implement such similar ideas into their respective businesses? The New York Times covered both of these stories independently, with the story about lawyers coming out about 4 months before coverage of a Chrysler plant doing essentially the same thing.
How and why in law firms
Some of the biggest law firms in the country have noticed that the high billing rates have caught up to customers. With such a weak economy, no one can afford to pay lawyers for their time.
This has caused the once invincible position to become a shadow of its former self. The $160,000 salary waiting for lawyers once they stepped through the firm’s doors is quickly disappearing. What lawyer now can afford to retire early (or even on time) to make way for a new wave of recruits?
Therefore law firms created a “non-partner track,” composed of full-fledged lawyers doing the same work they’d be doing had they been considered for the partner track. But they only make around $60,000, which I guess is fair considering they work and travel a bit less.
How and why in the auto industry
Like law, the business of making cars has long been a staple of the American economy and guaranteed employment if you had the qualifications, which long ago wasn’t much except a penchant to work hard.
However, the auto industry was one of the first to collapse and is still struggling to get back to full health. Chrysler, the subject of the NYT article, now pays the newest workers about $14 an hour while the veterans earn double that.
With most just happy to be employed, second-tier factory workers await to see if there is room for promotions and raises, as well as better benefits. They strive for a pension of $3,100 monthly.
Differences between industries
While for now both seem to be working with high degrees of success, it’s pretty obvious this only flies because of our abysmal economy. Five years ago no one would ever imagine a lawyer accepting less than $100K, or an autoworker that’s not extremely well taken care of by the union.
(The two-tier arrangement is under constant scrutiny by the United Automobile Workers who has always promoted equal pay among its workers.)
But why would this work in these two industries? And why do they need new workers so badly as to force expansion into such a controversial sphere as differing pay scales?
We have long looked to these two industries as inherent components of the American Dream. They are ever-expanding, provide ample opportunity for a lifelong career and are largely considered very safe jobs.
Or at least they were.
Importance of these programs
That is why they (and we) need programs like these to take off, and fast. We look to them as long-standing pillars representing successful American workers. How many people came to this country to work in an auto factory in Detroit?
And how many of them saved up money so that their kids could go off to college to become lawyers? These industries must be protected to the fullest extent. If it means that some will have to take a pay cut, it’s worth it, and the numbers prove it.
I only expect these programs to expand over the next few years as unemployment escalates and people become more desperate for work. This is almost like outsourcing, but keeping it within our borders.
Who knows which industry will effectively implement this next?