The Effect of Minimum Wages on Labour Market Outcomes: County‐Level Estimates from the Restaurant‐and‐Bar Sector

We use US county‐level data on employment and earnings in the restaurant‐and‐bar sector to evaluate the impact of minimum‐wage changes in low‐wage labour markets. Our estimated models are consistent with a simple competitive model in which supply‐and‐demand factors affect both the equilibrium outcome and the probability of the minimum wage being binding. Our evidence does not suggest that minimum wages reduce employment once controls for trends in county‐level sectoral employment are incorporated. Rather, employment appears to exhibit an independent downward trend in states that have increased their minimum wages relative to states that have not, thereby predisposing estimates towards reporting negative outcomes.     

Sectoral Productivity and the Distribution of Wages

Policy reports suggesting that productivity growth will raise the earnings of low-wage workers are based on the concept that gains from productivity will trickle down to raise the wages of workers at the lower end of the wage distribution. The compensation and employment systems of American industry do strongly link gains in industry productivity to wage increases for most workers. However, this analysis finds that the linkage of productivity change to wage change for the workers at the lower end of the distribution is virtually nonexistent. The empirical results of this study suggest that productivity increases have no effect on the wage change of workers at the lowest 10th percentile of the distribution and widen the dispersion in industry wages.     

What did unions do for union workers during the COVID-19 pandemic?

This research examines the impact of the COVID-19 pandemic on labour market outcomes of union workers, based on nationally representative data. I employ the difference-in-difference estimation to identify the effect of the COVID-19 pandemic on the employment, labour earnings and other labour market outcomes of union workers, relative to non-union workers. I find that, compared to non-union workers, union workers experienced greater job security, and the pre-pandemic union wage premium remained largely unchanged during the pandemic. There exists a large heterogeneity in the union effect on employment and real wages by worker characteristic. I also find that union workers, compared to non-union workers, were less likely to work remotely but more likely to receive pay for hours not worked due to COVID-19. The results suggest that unions provided workers with employment stability and an economic buffer during the pandemic-led recession.     

Privatization, City Residency, and Black-White Earnings Differentials: Evidence from the Public Transit Sector

Becker's theory on the economics of discrimination suggests that enhanced competition creates a business environment that discourages employers from paying racial earnings differences. This study tests this hypothesis by examining black-white earnings differentials for public transit bus drivers for pre- and post-privatization periods. The findings reveal an erosion of the racial earnings differential in the post-privatization period which is consistent with the Becker hypothesis. Public transit black union drivers earned more than their white counterparts prior to privatization. City residency accounts for 36 percent of this premium. However, the city-residency earnings advantage and the black-white union premium declinedappreciably in the post-privatization period.     

Wages Councils: Was There a Case for Abolition?

The 1993 Trade Union Reform and Employment Rights Act removed the remaining minimum wage protection for some 2.5 million low paid workers by abolishing the last 26 UK Wages Councils. The Government's case for abolition rested on three key arguments: (1) minimum wages do little to alleviate poverty since most covered workers do not live in poor households; (2) when in operation, minimum wages reduced employment in covered industries; (3) the problems of poverty that the wages councils were set up to deal with in 1909 are not relevant in today's labour market. In this paper we address each of these points in turn. We find that: (a) 50 per cent of families with at least one earner being paid wages council rates come from the poorest 20 per cent of families; (b) the existing evidence suggests that abolishing the Wages Councils is unlikely to create jobs; (c) the widening earnings distribution in the UK means that low pay is an increasingly important determinant of poverty. If anything, there appears to be an increasing need for minimum wage legislation in the UK.     

Minimum Wages and Youth Employment: Evidence from the Finnish Retail Trade Sector

Following an agreement between the trade unions and the employer organizations in 1993, Finnish employers could temporarily pay less than the existing minimum wage for young workers. We examine the effects of these minimum wage exceptions by comparing the changes in wages and employment of the groups whose minimum wages were reduced with simultaneous changes among slightly older workers for whom the minimum wages remained unchanged. Our analysis is based on payroll record data and minimum wage agreements from the retail trade sector. The results show that average wages in the eligible group declined only modestly. We find no significant effects on employment.     

The Effect of Mentorship and Sex-Role Style on Male-Female Earnings

The women in management literature contend that mentorship and sex-role style affect women's career success and ultimately earnings. We use data from the public accounting profession (N = 833) and a human capital wage decomposition model to examine the effect of mentorship and sex-role style on male-female wages and wage differentials. The results suggest that career mentorship modestly increases only women's earnings. However, sex-role style was found to significantly interact with gender to affect earnings and earnings differentials.     

Upstreamness,Wages and Gender: Equal Benefits for All?

This article provides first evidence on the impact of a direct measure of firm‐level upstreamness (i.e. the steps before the production of a firm meets final demand) on workers’ wages. It also investigates whether results vary along the earnings distribution and by gender. Findings, based on unique matched employer–employee data relative to the Belgian manufacturing industry for the period 2002–2010, show that workers earn significantly higher wages when employed in more upstream firms. Yet, the gains from upstreamness are found to be very unequally shared among workers. Unconditional quantile estimates suggest that male top earners are the main beneficiaries, whereas women, irrespective of their earnings, appear to be unfairly rewarded. Quantile decompositions further show that these differences in wage premia account for a substantial part of the gender wage gap, especially at the top of the earnings distribution.     

Detecting Effects of Living Wage Laws

We estimate the effects of living wage laws on wages of low-wage workers, focusing on the timing of policy, spurious associations, and the type of living wage law passed in a city. Our estimates point to sizable positive wage effects in cities with broad living wage laws that cover employers receiving business assistance from the city. We also explore disemployment effects of living wage laws and find evidence consistent with tradeoffs between wages and employment.     

Wage Structure and Dynamics in the Electronics Industry

This study analyzes wage patterns over time among California electronics employers. While the range of wages paid is substantial, employers on average make only small departures from market wage that are not pervasive across occupations or persistent across time. Employers appear able to change employment levels without affecting wages. Internal wage relativities also appear flexible. Differences between administered wage scales and actual wages paid are used to distinguish wage policy from market outcomes.     

What Do We Know About Worker Displacement in the U.S.?

Each year during the eighties, plant closings in the U.S. displaced roughly one-half million workers with three-plus years on the job. The recent data and empirical research reviewed here show that wage cuts lower only slightly the probability that a plant will close. Average earnings losses due to long spells of unemployment and to subsequent reduced wages are substantial. Minorities suffer an above-average rate of displacement, but their earnings losses are not unusually high. Women and older workers are no more likely than others to become displaced or to suffer greater earnings losses, but high-tenure workers lose more.     

Tipped Wage Effects on Earnings and Employment in Full‐Service Restaurants

We exploit more than 20 years of changes in state‐level tipped wage policy and estimate earnings and employment effects of the tipped wage using county‐level panel data on full‐service restaurants (FSR). We extend earlier work by Dube, Lester, and Reich ( 2010 ) and compare outcomes between contiguous counties that straddle a state border. We find a 10‐percent increase in the tipped wage increases earnings in FSRs about 0.4 percent. Employment elasticities are sensitive to the inclusion of controls for unobserved spatial heterogeneity. In our preferred models, we find small, insignificant effects of the tipped wage on FSR employment.     

Workforce Composition and Individual Wages — An Employer–Employee Data Analysis

The study analyses the impact of workforce composition and employee isolation — based on age, gender and citizenship — on entry wages of new employment relationships in German firms using employer–employee data. We allow for heterogeneous effects across distinct groups of workers and include worker and firm fixed effects to account for selection effects and unobserved heterogeneity. The results point to a negative impact of gender and age diversity for males and females, natives and foreigners and workers across the skill spectrum. Only for high-skilled workers, the negative effect of gender diversity is not statistically significant. Females receive, in addition, relatively low entry wages in establishments with a rather old workforce. With regard to the relative position, mainly gender isolation tends to exert an important influence on entry wages. The effect is positive only for females. In contrast, we estimate significant negative wage effects for males, natives, medium- and high-skilled workers. An international background of a firm's workforce and cultural isolation do not appear to generally affect entry wages.     

Who Fared Better? The Fortunes of Performance Pay and Fixed Pay Workers through Recession

Using the Annual Survey of Hours and Earnings, we explore whether the fortunes of employees paid for performance differ from those of fixed pay workers during recession. Only in the bottom quintile of the wage distribution were performance pay employees more likely to experience greater falls in real wages than fixed pay employees. Accounting for fixed unobserved worker characteristics suggests that this was not due to the wage‐setting mechanism itself, but that other factors are likely to be at play. While across most of the earnings distribution there was little evidence of greater wage flexibility among performance pay employees, they did have longer job tenure than fixed pay employees over the recession.     

Does an Entrepreneurial Career Pay for Women in China?

Using data from the Chinese Household Income Project survey in 2013, our male–female pay‐gap decomposition illustrates that the gender earnings gap is larger among the self‐employed than the wage‐employed after controlling for the effect of various pay‐determining characteristics. Our self‐employed versus wage‐employed decomposition also controls for selection into self‐employment as well as those pay‐determining characteristics. We find that wage‐employed women would earn less than their current earnings if they shifted to self‐employment, while wage‐employed men would earn more than their current earnings if they became self‐employed. In essence, self‐employed women suffer from double jeopardy. They not only earn less than men in self‐employment due to lower returns for the same pay‐determining characteristics, but women in self‐employment also earn less than women in wage employment when they have the same pay‐determining characteristics.     

The Determinants of Employee Productivity and Earnings

This paper uses data on employee wages and characteristics drawn from a nationwide sample of firms to re-examine the determinants of employee productivity and earnings. The results show that previous experience and tenure in the current job have significant, positive effects on wages and productivity. Hours of training are positively related to productivity and wage growth but generally not to levels of either. Lastly, gender effects are evident. Productivity growth and current productivity levels are slightly higher for females while their wages are significantly lower.     

A Note on Racial Differences in Employed Male Job Search

This article examines why black males are more likely to engage in employed job search than are their white counterparts. We focus primarily on the roles that expected wages, wage growth, and job characteristics have on explaining the observed differential. Using a sample of young men from the National Longitudinal Survey of Youth (NLSY), the results indicate that the greater propensity of blacks to engage in employed job search is the result of their desire to obtain better jobs with more agreeable working conditions.     

When Do Living Wages Bite?

Many features of living wage laws may influence the strength of their effects on wages and employment of low-skill individuals. Echoing past research, business assistance living wage laws generate stronger wage increases and employment reductions than contractor-only laws. But broader enforcement or implementation and geographic concentration of living wage laws also appear to strengthen their effects. Finally, geographic concentration may be more significant than the distinction between business assistance and contractor-only living wage laws.     

Temporary Help Work: Earnings,Wages, and Multiple Job Holding*

Temporary help services (THS) employment has been growing in size, particularly among disadvantaged workers. An extended policy debate focuses on the low earnings, limited benefits, and insecurity that such jobs appear to provide. We investigate the earnings and wage differentials observed between THS and other jobs in a sample of disadvantaged workers. We find lower quarterly earnings at THS jobs but a $1 per hour wage premium. We reconcile these findings in terms of the shorter duration and lower hours worked at THS jobs. We interpret the premium as a compensating wage differential.     

Pay Secrecy and the Gender Wage Gap in the United States

Legislators and advocates claim that pay secrecy perpetuates the gender wage gap and that the Fair Labor Standards Act (FLSA) should be amended to outlaw these practices. Using a difference‐in‐differences fixed‐effects human‐capital wage regression, I find that women with higher education levels who live in states that have outlawed pay secrecy have higher earnings, and that the wage gap is consequently reduced. State bans on pay secrecy and federal legislation to amend the FLSA to allow workers to share information about their wages may improve the gender wage gap, especially among women with college or graduate degrees.