The following information is to be used in answering the questions below. Massive Industries Amalgamated (MIA) has 1000 unionized workers represented by the Society of Organized Labour (SOL) including 10 truck drivers, 40 office staff, 30 lead hands and the rest are general labourers. The salaries for the workers are as follows: Category Initial Rate Rate after 1 year Rate after 2 years Rate after 3 years Truck Driver $27.00/hour $27.54/hour $28.08/hour $28.62/hour Office worker $21.00/hour $21.42/hour $21.84/hour $22.26/hour General labourer $25.00/hour $25.20/hour $25.40/hour $25.60/hour Lead hand $30.00/hour $30.60/hour $31.20/hour $31.80/hour The number of people in each pay category and step is as follows: Category Initial Rate Rate after 1 year Rate after 2 years Rate after 3 years Truck Driver 0 0 2 8 Office worker 3 2 2 33 General labourer 130 95 73 622 Lead hand 3 3 2 22 As well, the contract specifies that the employees get 2 weeks vacation after one year and 3 weeks after 3 years. Finally, the benefits include a life insurance policy for full time workers of 3 times annual pay to a maximum of $50,000. The cost of this benefit for the average office worker is $27 per month. All workers are full time and work 40 hours per week - 8 hours on each weekday. In addition to the vacation, they get 10 statutory holidays each year. You may assume that there are 260 weekdays during the year.

Question 1. MIA has offered a one year contract with an across the board increase of 4% on the first day of the new agreement to all steps and all categories. The SOL is not happy with that proposal as the majority of their members think the salary scale is unfair - specifically, the increments given to the general labourer category and the fact that the increment size is far less than the 2% the other categories get. Design a new salary grid that fixes the problem so that the increment size for the general labourers is a close as possible in % terms but also costs the employer roughly the same amount of money. Question 2. What is the effective type of cost for the life insurance benefit? And how much would it cost to change the benefit from 3 times annual pay to a maximum of $50,000" to 3 times annual pay to a maximum of $150,000"? Question 3. The SOL has proposed that vacation be increased by one week for all staff. What is the cost of that proposal as a percentage of actual wages paid to 2 decimal points? If you make any assumptions for any of the above answers, please state them