[6][7] They are particularly attractive to companies with high rates of turnover for new hires, such as in retail, or with many high-wage, high-skilled employees about to retire.
A 2008 study of collective bargaining agreements in the United States found that 25% of the union contracts surveyed included a two-tier wage system.
[3][6][8] Unions also find two-tier wage systems attractive because they encourage the employer to hire more workers.
[3][6][9] Some collective bargaining agreements contain "catch-up" provisions, which allow newer hires to advance more rapidly on the wage scale than existing workers so that they reach wage and benefit parity after a specified number of years, or they provide wage and benefit increases to new hires to bring them up to party with existing workers if the company meets specified financial goals.
[5] Some studies have found problems with two-tier systems like higher turnover for newer lower-paid employees and a demoralized workforce.