Case: Is the Two-Tier System Ethically Problematic
Employees at a cereal makers plant were "locked-out" from their jobs producing cereal for over 3 months. Company management and the union representing the employees reached a stalemate in negotiations resulting in the lockout. The union claims that the primary issue is the company's demand of dramatically increasing the number of temporary workers, who would earn $6 less per hour and receive fewer benefits. Critics claim this effectively creates a two-tier system at the plant. Under the current agreement, the companymay use temporary workers for up to 30% of the workforce, but the union claims the company is now pushing for 100%. The workers, who have had their health insurance suspended, fear that their jobs will either be replaced entirely by temporary workers, or they will be forced to take lower wages. The company, in the midst of a 4-year cost reduction effort labeled, claims that the change is necessary to remain competitive and that current employees will be unaffected by the change.
1. Are two-tier systems ethically problematic?
2. When the agreement with the labor union expires, what should the company do?
3. Should the workers stand firm on retaining their wages and demand the company cut expense elsewhere?