The Globe and Mail is reporting that two-tier wage scales are becoming more common as corporations attempt to deal with the current economic context and try to stay competitive on a global level. Two-tier wage scales, whereby newly hired employees are paid at a lower rate than their colleagues performing the exact same work, are said to not only be a form of discrimination, but also bad for morale and ultimately production. From a management perspective, it is a way to cut down on labour costs and to stay afloat. Interestingly, in the cases of Ford and GM cited, cited in the article, the two-tier wage scale is not meant to last forever, as new hires will be able to reach the top salary scale within 10 years.
Two-tier wage scales may not necessarily increase in all places. In the province of Quebec, for example, the Act respecting labour standards prohibits disparity in treatment when it comes to one of the enumerated labour standards between employees performing the same tasks in the same establishment when this disparity is based solely on date of hire.
Are two-tier wage scales in some ways discriminatory or do they represent a good solution in tougher times?