How do proponents of two-tier wage systems argue they can benefit companies?

Proponents of two-tier wage systems argue that they can benefit companies primarily by allowing flexibility in hiring and reducing costs. This type of wage structure typically involves offering different pay rates based on when employees were hired or their specific roles within the company. By implementing a two-tier wage system, companies can manage their labor costs more effectively.

For instance, new employees may start at a lower wage compared to long-term employees, which can help businesses save on payroll expenses. This flexibility also allows companies to adapt more easily to market changes, as they can hire new talent at a lower cost while retaining experienced workers who are compensated at a higher rate. This can lead to a more sustainable workforce cost structure and potentially enhance competitiveness in the market.

Other options do not align with the arguments typically made in favor of two-tier wage systems. For example, ensuring all employees receive the same pay contradicts the essence of a two-tier system, which is distinguished by different pay levels. Developing a more skilled workforce might be a goal of many businesses, but the two-tier wage system primarily focuses on cost management rather than skill development. Similarly, while performance-related bonuses can be a valuable part of a compensation strategy, they are not inherent to the concept of a two-tier wage system