Something gnaws in the back of Rose Allen's mind as she tints paint, cuts wire or searches for screws and bolts in the hardware department of the Meijer's department store here.
Behind her friendly greeting, "May I help you?" she is often seething in frustration at being paid about $2 an hour less than a co-worker who performs the same tasks that she does.
The pay differential is not because of sex discrimination or poor job performance. It's because Meijer and the union representing Allen signed a "two-tier" wage contract more than 6 years ago setting a higher wage scale for workers then on the job and a lower one for those hired since then. Allen, who went to work at Meijer's five years ago, is in the lower tier.
The contract at Meijer's is part of a recent trend in labor-management concessions that has been credited with keeping inflation low and boosting employment. But it also may be dividing union leadership from their members, damaging productivity, and permanently lowering the wage structure of many industries.
"One of the quietest but potentially most significant developments on the wage front has been the emergence of two-tier collective bargaining settlements," said the Wharton Econometrics research group in a recent report.
Two-tier contracts generally specify that employes hired after a certain date will be paid less than employes on the job when the contract is approved. What happens is that workers, faced with pay cuts or layoffs, accept concessions in pay or benefits affecting those not yet hired. In some contracts the employes on the low tier will never catch up with those on the high tier.
In others, new employes eventually close the gap and earn the same as employes hired before the contract went into effect, but catching up can take many years.
Some researchers are reporting a marked increase in two-tier contracts in the last three years in such industries as chemicals, communications, airlines, insurance, retail, wholesale, printing, textiles, food and other services.
Many of the plans were adopted during recent recessions as temporary emergency measures. Others were a response to a sudden surge of competition that has hit some industries because of deregulation or rising imports.
But because competitive pressures still exist, some unions that helped negotiate these plans say they cannot get rid of them now. Some economists say such contracts are gaining in popularity among employers who want to cut costs and among unions that want to preserve and increase jobs.
Generally, starting salaries in new two-tier pay contracts last year averaged about 15 percent below the previous starting salaries for the same groups of workers, the Wharton report said.
"These provisions will have little immediate impact on inflation, but as new hires represent a larger proportion of the work force in these industries, a downward wage bias will result," it said.
Most of the two-tier contracts are relatively new, so it is difficult to evaluate the effect of such a wage scale on the economy, on the industry involved or the unions, economists said.
However, Wharton recently estimated that the trend easily could shave between 0.2 percentage points and 0.3 percentage points directly off the annual growth rate of aggregate non-farm wages within about five years and perhaps double that reduction when indirect effects are factored in.
The Meijer experience is unique in that it is one of the older two-tier contracts and many of the members hired in the low tier since 1978 may be in the majority of the union by the next contract negotiations in 1987, said Robert Potter, president of Local 951 of the Union of Food and Commercial Workers, which represents the Meijer employes.
"In retrospect, if I had to renegotiate in 1978, we would not have created the two-tier approach," Potter said. In the case of Meijer, the two-tier system helped the company to expand and add about 3,000 jobs that otherwise would not have been created, Potter said. However, the concessions have not made the company strong enough financially to permit the elimination of the two-tier system, Potter said.
Such systems have flourished in recent years, growing from about 5 percent of all nonconstruction settlements in 1983 to 8 percent last year, according to the Bureau of National Affairs.
About 4 percent of manufacturing settlements last year mentioned two-tier plans, an increase from 2 percent the previous year, BNA said. The two-tier programs predominated in the transportation equipment, fabricated metals, instruments and some machinery industries, BNA said.
In settlements outside of manufacturing, 17 percent of contracts settled in 1984 mentioned two-tier systems, an increase from 9 percent the previous year, BNA said. Most of those plans were in the wholesale, retail, airlines, motor transportation and utilities industries, BNA said.
Daniel Mitchell, a UCLA economist and leading labor specialist, recently completed a preliminary survey of two-tier managers in the personnel and industrial relations fields in Los Angeles. A majority of these managers said they expect a substantial increase in the number of employers using two-tier pay plans.
According to preliminary results of the survey taken last November and December, 51 percent of the respondents whose firms engaged in collective bargaining had negotiated at least one two-tier plan. Only a few non-union respondents said a two-tier plan had been established.
Most of the managers responding to the survey said that they used the two-tier plans because they were easier to "sell" to unions than other concessions. The managers generally saw the two-tier plans as an important new labor cost control measure and agreed that it should not be limited to fringe benefits.
Many of the managers were concerned that a two-tier plan could lead to possible charges of discrimination by women and minorities if they constituted a high proportion of new hires. They also felt that two-tier systems could create dissension within unions because of friction between new hires and the higher paid veteran workers. As a result, employe morale and productivity could decline, the managers feared.
In many respects, the Meijer case bears out findings of the Los Angeles survey.
There was a rapid growth in non-union competition in the retail industry in southwest Michigan during the mid-1970s when the percentage of union employes in the industry's work force declined from more than 60 percent to 30 percent, said James Martin, associate professor of management and industrial relations at Wayne State University.
Using the two-tier plan "initially was viewed by both parties as a solution to a particular problem" of assuring Meijer's competitiveness against non-union rivals, Potter said. But "what was viewed as an immediate problem became a long-term problem," Potter said.
By the early 1980s it became clear that the two-tier system had not driven out the non-union, independent retailers. By the next contract negotiations in 1981, the competition was getting worse. Independents were making strong inroads in Michigan, so the union didn't attempt to get rid of the two-tier system, Potter said. The union also had to make other concessions such as the elimination of double time on Sundays, Potter said.
By the end of 1982, Meijer was caught in a worsening competitive situation, and asked the union to reopen the contract and negotiate additional concessions, Martin said in a study of the Meijer situation. In March 1983 by a two-to-one margin the bargaining unit agreed to reduce benefits for all employes hired after April 1, creating a third tier of benefit reductions for new employes, Martin said.
By the time the recent contract was negotiated late last year, the third tier was eliminated, but a two-tier system remained.
Labor economists said that soon lower-tier workers will become the majority in some of the two-tier union bargaining units and if they choose to, could demand equal footing with veteran workers. But will they? In industries where competition is still intense and workers fear for their jobs, some lower-tier workers say they would rather protect their positions by agreeing to a third tier of even lower wages for future new hires.
"Our union was only one of many that went that route" toward two-tier, said Joyce Barber, a 12-year veteran of a Meijer store in Greenville, Mich., who is one of the high tier wage earners. Barber, a shop steward, said that employes seem to be most upset about losing double-time pay on Sundays.
"When it was done, a lot of people felt they had given the company back a lot at that time," in concessions, Barber said. Therefore, they preferred to pass concessions along to those who had not yet been hired.
"I look at it personally," said Douglas Eager, a cashier at a Grand Rapids Meijer store who said he would not hesitate to vote lower wages for new workers if it meant keeping his job, higher pay and benefits. "It's greed."
If faced with voting on a contract creating a low tier for someone else, Allen, a lower tier employe herself, said, "I would probably take it. Isn't that terrible to say? I almost feel guilty about it."