When Jack was hired in 2011 at Ford Motor Company, he was offered $14 an hour. His best friend Sam started at the same plant doing the same job two years earlier making $28 an hour. This is an example of a) union security clauses. b) two-tier wage contracts. c) cost-of-living adjustments. d) incentives. e) givebacks.

The correct answer is B. This is an example of two-tier wage contracts.

Explanation:

The example of Jack and his friend Sam, hired at the same company, doing the same job and charging different wages, is a clear example of the two-tier wage system, whereby companies hire workers to perform equal tasks with different wages.

This usually happens because companies, as a way to lower their costs, hire employees at lower wages than those of previously hired employees, which in practice carry out the same activities but earning a totally different salary.

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