Which demographic is often primarily affected by two-tier wage systems?

The primary demographic affected by two-tier wage systems is typically new hires and entry-level employees. This wage structuring occurs when a company establishes two separate pay scales for workers performing the same jobs but at different levels of wages based on when they were hired.

In many cases, new hires receive lower wages compared to more experienced employees who have been with the company longer. This creates a clear divide where established employees benefit from higher pay, often due to factors like tenure, bargaining power, or collective bargaining agreements, while new employees start on a less favorable compensation scale. As a result, new and entry-level workers often find themselves in a position where they are earning less for the same role than their seasoned counterparts, which can impact morale and job satisfaction.

This wage discrimination can also affect the recruitment and retention efforts of the organization, as potential new hires may be deterred by the lower entry-level wages. Understanding this dynamic is key for leaders aiming to foster an equitable and motivated workforce.