Wages: A Two-Tier Sword

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One week after negotiations broke down on a new contract with unions representing 600,000 postal workers, the U.S. Postal Service last week imposed a two-tier wage system to reduce costs. Under the plan, which Morris Biller, president of the American Postal Workers Union, denounced as a "provocative, union-busting tactic," newly hired workers will be paid about 20% less than those already on the job. Letter carriers, for instance, will start at $17,352, compared with $21,511 for workers hired earlier. The U.S.P.S. takes on about 40,000 workers every year.

Employers see such plans, which are being increasingly proposed in contract negotiations, as a way of bringing down labor costs without penalizing present workers. Unions say that the plans pit older workers against younger ones, who resent being paid less for the same work, and make older workers afraid that they will be forced out to make room for cheaper labor. But in several cases where employees feared layoffs, plant shutdowns or even bankruptcies, they have accepted such plans, sometimes against the wishes of their unions. Workers at Boeing, American Airlines and Safeway Stores have approved two-tier wage agreements in the past two years.