The Two-Tier Wage System: Fairness vs. Employment

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Four years ago, the United Auto Workers Union allowed the three Detroit auto makers to put in place a two-tier system for paying employees, which allowed them to continue to functioning and stay in business as they struggled to stay afloat. New hires were given a salary around $14 an hour, while their tier-one counterparts were making almost double that. The system has helped increase employment in Detroit and kept the auto giants from tanking, but many people say it's unfair.

Elisa (who asked us not to use her last name), a worker at one of the auto giants in the Detroit area, and Mitchell (last name also omitted), who works for GM's Lansing plant in Michigan, speak about their experience as second-tier employees. Peter Cappelli, George W. Taylor professor of management at the University of Pennsylvania's Wharton School, talks about whether this system could work for other industries.