Two-tier pay plans, under which new hires are paid on a lower pay scale than existing employees, have been used with increasing
frequency in union-management contracts. The two-tier phenomenon appears to be associated with the wider concession bargaining
movement that began in the early 1980s. In this study, management attitudes toward and forecasts about two-tier pay plans
are explored by means of a questionnaire survey.
In general, the management community is found to be optimistic about the spread and utility of two-tier pay plans in the near
term. Managers in firms that actually have two-tier plans are more enthusiastic about their impacts than other managers. Over
a longer term, however, the managers surveyed tend to believe that separate wage scales under two-tier plans will eventually
be merged into a unified scale.
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