Accounting for the Proliferation of Two-Tier Wage Settlements in the U.S. Airline Industry, 1983–1986

Abstract

This study examines the wave of two-tier wage settlements in the U.S. airline industry that occurred from 1983 through 1986. Although two-tier plans spread throughout the industry, it was the more prosperous carriers that led the way and that were most apt to negotiate them—often over considerable union opposition. One inducement for introducing two-tier plans was competitive pressure arising from divergent labor costs in the industry, but carriers were also influenced by such potential benefits as improved morale, a chance to alter the length of wage progressions, advantages in future bargaining, and greater financial stability in the eyes of financial backers. The author sees the rash of two-tier settlements as part of a larger contest to shape labor relations in the re-consolidated, post-deregulation airline industry.