A case in point is Caterpillar, which produces earthmoving and other heavy equipment. The company in 1998 signed a six-year agreement that allowed it to maintain 15 percent of its workforce as “supplemental employees,” starting at 30 percent lower pay and no benefits. The contract approved last year set a 42 percent lower wage rate for new hires and shifted 20 percent of health-care costs onto these workers. Under the lower-tier setup, newly hired workers earn no more than $12.50 an hour, compared to $23 an hour made by high seniority machinists.

“Already, 50 percent of the upper-tier workers who were around in 2004 have left, through retirement and attrition,” noted a February 26 New York Times article, titled “Rewriting the Social Contract: Two Tiers, Slipping Into One.”

The article added, “Having essentially won against the U.A.W. [United Auto Workers], Caterpillar’s managers are trying to persuade hourly workers to think of the current contract as having only one tier, the lower one, while those in the upper tier should be thought of as older workers whose wages were ‘grandfathered’ until they depart.”

In its drive to weaken the UAW, Caterpillar in the 1990s built 20 smaller, more specialized factories in the South with lower wage rates. Currently only half of Caterpillar’s 22,000 hourly workers in the United States belong to the UAW, 6,000 less than in the early 1990s. Meanwhile, Caterpillar reported revenues of $36.3 billion last year, up 20 percent from 2004.
 
 
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On the Picket Line
Australia: union defends young worker beaten by boss  
 
 
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