Low-wage Industries Research Articles

Monopsonistic competition, low-wage labour markets, and minimum wages – An empirical analysis

ABSTRACTThis article investigates the degree of monopsony power of employers in different industries against the background of a statutory minimum wage introduction in Germany in January 2015. A semi-structural estimation approach is employed based on a dynamic model of monopsonistic competition. The empirical analysis relies on a linked employer–employee data set which allows to control for observed heterogeneity both on the worker and on the firm side. The results show important differences in monopsonistic competition among low-wage industries: While retailing, the hotel and restaurant industry as well as agriculture can be described as monopsonistic labour markets, this is not true for other services and manufacturing of food products. From a policy point of view, the introduction of a uniform minimum wage may therefore lead to different employment reactions in industries with a similar minimum wage bite.

Development and Pilot Test of the Workplace Readiness Questionnaire, a Theory-Based Instrument to Measure Small Workplaces' Readiness to Implement Wellness Programs.

To develop a theory-based questionnaire to assess readiness for change in small workplaces adopting wellness programs. In developing our scale, we first tested items via "think-aloud" interviews. We tested the revised items in a cross-sectional quantitative telephone survey. The study setting comprised small workplaces (20-250 employees) in low-wage industries. Decision-makers representing small workplaces in King County, Washington (think-aloud interviews, n = 9), and the United States (telephone survey, n = 201) served as study subjects. We generated items for each construct in Weiner's theory of organizational readiness for change. We also measured workplace characteristics and current implementation of workplace wellness programs. We assessed reliability by coefficient alpha for each of the readiness questionnaire subscales. We tested the association of all subscales with employers' current implementation of wellness policies, programs, and communications, and conducted a path analysis to test the associations in the theory of organizational readiness to change. Each of the readiness subscales exhibited acceptable internal reliability (coefficient alpha range, .75-.88) and was positively associated with wellness program implementation ( p < .05). The path analysis was consistent with the theory of organizational readiness to change, except change efficacy did not predict change-related effort. We developed a new questionnaire to assess small workplaces' readiness to adopt and implement evidence-based wellness programs. Our findings also provide empirical validation of Weiner's theory of readiness for change.

HealthLinks randomized controlled trial: Design and baseline results

Small employers, especially those in low-wage industries, frequently lack the capacity and resources to implement evidence-based health promotion interventions without support and assistance. The purpose of this paper is to (a) describe the intervention design and study protocol of the HealthLinks Trial and (b) report baseline findings. This study is a three-arm randomized controlled trial testing the impact of the HealthLinks intervention on worksites' adoption and implementation of evidence-based interventions. Group 1 will receive HealthLinks, Group 2 will receive HealthLinks plus wellness committees, and Group 3 will be a delayed control group. Seventy-eight employers are participating in the study; and 3302 employees across the worksites participated in the baseline data collection. Employers and employees will participate in follow-up surveys at one and two years after baseline to measure implementation (one year) and maintenance (two years) of HealthLinks interventions. Study outcomes will determine whether HealthLinks is an effective approach to increasing evidence-based health promotion in small, low-wage worksites and whether wellness committees are a capacity-building tool that increases HealthLinks' effectiveness.

Monopsonistic Competition, Low-Wage Labour Markets, and Minimum Wages: An Empirical Analysis

This paper investigates the degree of monopsony power of employers in different industries against the background of a statutory minimum wage introduction in Germany in January 2015. A semi-structural estimation approach is employed based on a dynamic model of monopsonistic competition. The empirical analysis relies on a linked employer-employee data set which allows to control for heterogeneity both on the worker and on the firm side. The results show important differences in monopsonistic competition among low-wage industries: While retailing, the hotel and restaurant industry as well as agriculture can be described as monopsonistic labour markets, this is not true for other services and manufacturing of food products. From a policy point of view, the introduction of a uniform minimum wage may therefore lead to different employment reactions in industries with a similar minimum wage bite.

“Brain Magnet”: Research Triangle Park and the Origins of the Creative City, 1953-19651

This essay aims to historicize urban theorist Richard Florida’s influential formulation of the “creative class” by focusing on the emergence of a high-tech economy in North Carolina’s Research Triangle metropolitan area. In the 1950s, a powerful coalition of academics, businesspeople, and politicians launched a plan to move the state away from its traditional reliance on low-wage industries by founding a research park between Raleigh, Durham, and Chapel Hill, believing that scientific firms would value the park’s proximity to several nearby colleges and universities. The essay argues that local boosters emphasized the area’s cultural opportunities and intellectual climate as major quality-of-life considerations not only for high-tech companies, but also the scientists and engineers that they hoped to employ. Research Triangle Park thus created a blueprint for subsequent development strategies—later promoted by Florida, among other scholars and consultants—that made arts, education, and other cultural institutions central to the marketing of an urban area’s identity.

Perspectives on Workplace Health Promotion Among Employees in Low-Wage Industries.

Study goals were to (1) understand the attitudes of employees in low-wage industries toward workplace health promotion, including views on appropriateness of employer involvement in employee health and level of interest in workplace health promotion overall and in specific programs, and (2) determine the potential for extending workplace health promotion to spouses and partners of these employees. The study used 42 interviews of 60 to 90 minutes. Interviews were conducted with couples (married or living together) in the Seattle/King County metropolitan area of Washington State. Study participants were forty-two couples with one or more members working in one of five low-wage industries: accommodation/food services, education, health care/social assistance, manufacturing, and retail trade. The study employed qualitative analysis of interview transcripts using grounded theory to identify themes. Employees consider workplace health promotion both appropriate and desirable and believe it benefits employers through increased productivity and morale. Most have little personal experience with it and doubt their employers would prioritize employee health. Employees are most interested in efforts focused on nutrition and physical activity. Both employees and their partners support extending workplace health promotion to include partners. Employees and their partners are interested in workplace health promotion if it addresses behaviors they care about. Concern over employer involvement in their personal health decisions is minimal; instead, employees view employer interest in their health as a sign that they are valued.

The Impact of Franchising on Labor Standards Compliance

Recent studies document pervasive noncompliance with basic labor standards in industries with high concentrations of low-wage workers. The authors examine how franchising, a common form of business organization in low-wage industries, affects compliance. They estimate the effect of franchise ownership on compliance with federal minimum wage and overtime standards in the fast food industry using unique data on Top 20 branded restaurants. Franchised outlets have far higher levels of noncompliance than comparable company-owned establishments. The authors argue that observed differences arise from internal incentives facing franchisees versus franchisors rather than from external enforcement pressures facing the parties.

Manufacturing Job Loss in U.S. Deindustrialized Regions—Its Consequences and Implications for the Future

The loss of manufacturing jobs in the United States has been widely noted in the popular press as well as in public policy debate. We examine several of the most prominently made assertions about manufacturing decline and its consequences for deindustrializing metropolitan areas and find not all of them supported by the data. In particular, we find that, given their industrial structure some of these areas performed better than expected, that long-term economic distress was not inevitable, that manufacturing remains an important component in many metropolitan area economies, and that much of the growth in the service sector is based upon or complementary to the existence of manufacturing. We also find that low growth in these deindustrialized areas was due more to these regions losing their market share of individual industries to other U.S. regions than it was to the areas having an adverse industrial structure, that economies that were more diversified in 1980 did not have greater employment growth from 1980-2011 than those that were less diverse, and that declines in manufacturing did result in a movement of jobs from relatively high-wage to relatively low-wage industries and thus a decline in earnings per jobs.

Monopsonistic Competition, Low-Wage Labour Markets, and Minimum Wages An Empirical Analysis

This paper investigates the degree of monopsony power of employers in different industries against the background of a statutory minimum wage introduction in Germany in January 2015. A semi-structural estimation approach is employed based on a dynamic model of monopsonistic competition. The empirical analysis relies on a linked employer-employee data set which allows to control for heterogeneity both on the worker and on the firm side. The results show important differences in monopsonistic competition among low-wage industries: Retailing as well as the hotel and restaurant industry can be described as monopsonistic labour markets, while this is not true for agriculture and mining as well as private and public services. From a policy point of view, the introduction of a uniform minimum wage may therefore lead to different employment reactions in industries with a similar wage structure.

Income Distribution across Ethnic Groups in Malaysia: Results from a New Social Accounting Matrix

A new social accounting matrix is constructed for Malaysia for the year 2000 to analyze sources of income inequality among ethnic groups in Malaysia. The analysis reveals that income inequality can be decomposed into the interaction of: (i) hourly wages; (ii) working hours per week; and (iii) number of dependents per household. The results of the analysis suggest that occupational differences are the main factor contributing to wage inequality in Malaysia. Ethnic Malays tend to work in low-wage industries while ethnic Chinese and Indians are more likely to work in higher-wage industries.

The effect of institutional regime change within the new deal on industrial output and labor markets

Markets during the New Deal operated under a number of different institutional regimes, which were marked by executive orders, the passage of various pieces of legislation, and Supreme Court rulings on their constitutionality. Specifically, we break the New Deal period into the following six regimes: the Hundred Days, the President's Reemployment Agreement, the National Recovery Administration Codes of Fair Competition, the Schechter era, the National Labor Relations Act, and the Fair Labor Standards Act. Under these various regimes industrial markets were subject to different regulations relating to hourly wage rates, hours of work, the nature of competition, and unionization. Vector Autoregressive (VAR) regressions are run using a monthly panel of employment, weekly hours worked, wage rates, prices, and output for 11 major industries. We find that key policy and legal changes were associated with large and statistically significant movements in economic variables. Furthermore, changes in institutional regimes impacted different types of industries unevenly. For example, low-wage industries saw the largest increases in wages, and drops in output, after the mandated wage increases in 1933.

Urban Areas in the Transformation of the South: A Review of Modern History

Since the 1940s, the southern US has been transformed from a region of backward agriculture, low-wage industries located in small towns and rural areas, and unrelenting racial segregation into a modern society and economy. In 1950, there were no metropolitan areas in the South with a population of one million or more, but 18 had populations in excess of one million in 2000. The populations of the Atlanta, Dallas-Fort Worth, Houston, and Miami metropolitan areas grew to over 4 millions. Population growth in the 18 largest metropolitan areas accounts for 63% of the total population growth in the South from 1950 to 2000. The transformation of the South is, to a sizable extent, a transformation to an urbanized society. This paper documents this urbanization by examining population and employment growth in those 18 metropolitan areas.

Internal Labor Markets and Investment in Conglomerates

The literature on conglomerates has focused on the allocation of investments across divisions. I study frictions in the internal labor market as a determinant of allocation of investments. Using detailed plant-level data, I document wage convergence in conglomerates: workers in low-wage industries collect higher-than-industry wages when the diversified firm is also present in high-wage industries. Exploiting a quasi-experiment involving the implementation of the NAFTA agreement that exogenously increases worker wages of exporting plants, I track the evolution of wages in non-exporting plants in diversified firms that also own exporting plants and find a significant increase in wages of these plants relative to unaffiliated non-exporting plants after the event. I confirm this effect by studying exogenous changes in worker wages that result from changes in minimum wage laws at state level and analyze the transmission towards workers of the firm in other states. This pattern of wage convergence affects investments. Plants where workers collect higher-than-industry wages increase the capital-labor ratio in response to their higher labor cost and this response to higher wages is associated with higher investment in some divisions.

All Work and No Pay: Violations of Employment and Labor Laws in Chicago, Los Angeles and New York City

Despite three decades of scholarship on economic restructuring in the United States, employers' violations of minimum wage, overtime and other workplace laws remain understudied. This article begins to fill the gap by presenting evidence from a large-scale, original worker survey that draws on recent advances in sampling methodology to reach vulnerable workers. Our findings suggest that in America's three largest cities, violations of employment and labor laws are pervasive across low-wage industries and occupations, affecting a wide range of workers. But while worker characteristics are correlated with violations, job and employer characteristics play the stronger role, including industry, occupation and measures of informality and nonstandard work. We therefore propose a framework in which employers' noncompliance with labor regulations is one axis of a competitive strategy based on labor cost reduction, contributing to the reorganization of work and production in the 21st century labor market.

Workplace Health Promotion Implementation, Readiness, and Capacity Among Midsize Employers in Low-Wage Industries

To describe workplace health promotion (WHP) implementation, readiness, and capacity among midsize employers in low-wage industries in the United States.A cross-sectional survey of a national sample of midsize employers (100 to 4999 employees) representing five low-wage industries.Employers' WHP implementation for both employees and employees' spouses and partners was low. Readiness scales showed that employers believe WHP would benefit their employees and their companies, but they were less likely to believe that WHP was feasible for their companies. Employers' capacity to implement WHP was very low; nearly half the sample reported no capacity.Midsize employers in low-wage industries implement few WHP programs; their responses to readiness and capacity measures indicate that low capacity may be one of the principal barriers to WHP implementation.

Stakeholder Perspectives on Workplace Health Promotion: A Qualitative Study of Midsized Employers in Low-Wage Industries

Study goals were to (1) describe stakeholder perceptions of workplace health promotion (WHP) appropriateness, (2) describe barriers and facilitators to implementing WHP, (3) learn the extent to which WHP programs are offered to workers' spouses and partners and assess attitudes toward including partners in WHP programs, and (4) describe willingness to collaborate with nonprofit agencies to offer WHP. Five 1.5-hour focus groups. The focus groups were conducted with representatives of midsized (100-999 workers) workplaces in the Seattle metropolitan area, Washington state. Thirty-four human resources professionals in charge of WHP programs and policies from five low-wage industries: accommodation/food services, manufacturing, health care/social assistance, education, and retail trade. A semistructured discussion guide. Qualitative analysis of focus group transcripts using grounded theory to identify themes. Most participants viewed WHP as appropriate, but many expressed reservations about intruding in workers' personal lives. Barriers to implementing WHP included cost, time, logistical challenges, and unsupportive culture. Participants saw value in extending WHP programs to workers' partners, but were unsure how to do so. Most were willing to work with nonprofit agencies to offer WHP. Midsized, low-wage employers face significant barriers to implementing WHP; to reach these employers and their workers, nonprofit agencies and WHP vendors need to offer WHP programs that are inexpensive, turnkey, and easy to adapt.

Improving Low-Wage, Midsized Employers' Health Promotion Practices: A Randomized Controlled Trial

The Guide to Community Preventive Services (Community Guide) offers evidence-based intervention strategies to prevent chronic disease. The American Cancer Society (ACS) and the University of Washington Health Promotion Research Center co-developed ACS Workplace Solutions (WPS) to improve workplaces' implementation of Community Guide strategies. To test the effectiveness of WPS for midsized employers in low-wage industries. Two-arm RCT; workplaces were randomized to receive WPS during the study (intervention group) or at the end of the study (delayed control group). Forty-eight midsized employers (100-999 workers) in King County WA. WPS provides employers one-on-one consulting with an ACS interventionist via three meetings at the workplace. The interventionist recommends best practices to adopt based on the workplace's current practices, provides implementation toolkits for the best practices the employer chooses to adopt, conducts a follow-up visit at 6 months, and provides technical assistance. Employers' implementation of 16 best practices (in the categories of insurance benefits, health-related policies, programs, tracking, and health communications) at baseline (June 2007-June 2008) and 15-month follow-up (October 2008-December 2009). Data were analyzed in 2010-2011. Intervention employers demonstrated greater improvement from baseline than control employers in two of the five best-practice categories; implementing policies (baseline scores: 39% program, 43% control; follow-up scores: 49% program, 45% control; p=0.013) and communications (baseline scores: 42% program, 44% control; follow-up scores: 76% program, 55% control; p=0.007). Total best-practice implementation improvement did not differ between study groups (baseline scores: 32% intervention, 37% control; follow-up scores: 39% intervention, 42% control; p=0.328). WPS improved employers' health-related policies and communications but did not improve insurance benefits design, programs, or tracking. Many employers were unable to modify insurance benefits and reported that the time and costs of implementing best practices were major barriers. This study is registered at clinicaltrials.gov NCT00452816.

Salarios y tecnología en los patrones regionales del tratado comercial Estados Unidos-México

Este documento analiza datos recientes para identificar las tendencias emergentes en la combinación sectorial de exportaciones e importaciones entre México y Estados Unidos. El análisis pretende mostrar si son las industrias con bajos salarios y baja tecnología las que han contribuido con la mayoría de las exportaciones mexicanas a Estados Unidos, y, concomitantemente, si son las industrias con altos salarios y alta tecnología las que han participado principalmente en las exportaciones estadounidenses hacia México.

All Work and No Pay: Violations of Employment and Labor Laws in Chicago, Los Angeles and New York City

Despite three decades of scholarship on economic restructuring in the US, employers’ violations of minimum wage, overtime, and other workplace laws remain understudied. This article begins to fill the gap by presenting evidence from a large-scale, original worker survey that draws on recent advances in sampling methodology to reach vulnerable workers. Our findings suggest that in America’s three largest cities, violations of employment and labor laws are pervasive across low-wage industries and occupations, impacting a wide range of workers. But while worker characteristics are correlated with violations, it is job and employer characteristics that play the stronger role, including industry, occupation, and measures of informality and nonstandard work. We therefore propose a framework where employers’ noncompliance with labor regulations is one axis of a competitive strategy based on labor cost reduction, contributing to the reorganization of work and production in the 21st century labor market.

When does transition increase the gender wage gap?

In the context of underlying stability in female participation rates, the gender wagegap, measured by the log of monthly wages, more than doubled in Belarus from 1996 to 2006. In this respect, the country has experienced a variant of the transition which occurred in the former Soviet Union where relative female wages fell by more than female participation. We have used the Machado and Mata (2005) analysis of the gender gap distribution. This reveals that the effect of coefficients on observed characteristics in widening the gap was increasing over time, especially in the lower and middle deciles of the wage distribution. At the same time, the effect of the characteristics themselves in reducing the gap was shrinking. The decomposition of changes in the gap over time, based on Juhn et al. (1991), confirms that the contraction of women’s relative wages has been caused both by a deterioration in the observed characteristics of female workers and by the associated remuneration. Changes in the residual wage distribution tend to slightly reduce the gap rather than, as is the case elsewhere, to increase it. The analysis carried out in line with Neuman and Oaxaca (2004) suggests that the increased gap was not caused by sample selection. Instead, two observed factors are found to be mainly responsible for the results: hours of work have increased for men more than for women and women have experienced segregation in low-wage industries.