From 7 am to 3 pm each day, John Arnold darts around Caterpillar's "materials-handling facility" in his forklift, maneuvering it with the deftness of a NASCAR driver. His job is to unload tractor parts from flatbed trucks and then deposit those parts--from engine gaskets to one-ton tractor buckets--in the huge store yard at the plant, just east of Peoria, Illinois. An earnest, deep-voiced giant of a man, Arnold likes his job, with one major reservation--twentysomethings like him can earn only three-fourths as much as the fiftysomethings who work alongside him.

Under the two-tier contract at Caterpillar, the most Arnold can ever earn is $14.90 an hour, or $31,000 a year--so little, he says, that some of his co-workers are living at home with their parents. "Some," he said, "are even on food stamps."

A 52-year-old who works alongside Arnold, doing exactly the same work, earns $19.03 an hour, or just under $40,000 a year, because employees who started before Arnold began in 1999 are on a higher wage scale. "I don't like it," Arnold said. "I wish I was at least able to get to the pay scale that the guys who are right next to me are making."

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