Wage Comparisons Research Articles

The U.S. Low-Wage Structure: A McWage Comparison

Abstract Thanks to standardized work protocol and technology of McDonald's restaurants, the hourly wage of McDonald's Basic Crew enables wage comparisons under near-identical skill inputs and hedonic job conditions. McWages capture labor costs in entry-level jobs, while the Big Macs (earned) Per Hour (BMPH) index measures corresponding purchasing power of wages. We document large and growing geographical wage differences in standardized jobs using data covering most U.S. counties during 2016-2023. Before the Covid-19 pandemic, there was no BMPH growth where minimum wages stayed constant, but the pandemic wage increase, which diminished the importance of minimum wages, was stronger in these areas.

A study on regional return to education in South Korea: comparison of male and female wages

ABSTRACT This study examines the return to education in South Korea by comparing metropolitan areas with non-metropolitan areas. It utilizes the Korean Labor and Income Panel Study from 2018 and 2019 for analysis, alongside the Mincer equation. The findings indicate that female workers have a higher return to education compared to male workers. The Oaxaca decomposition method reveals that private academies contribute to increasing differential treatment between men and women, whereas public education reduces the gap. Additionally, the regression discontinuity design method shows that the university premium is significantly different by region.

Wages, labour markets, and living standards in China, 1530–1840

This article studies the long-term wage development in China between 1530 and 1840. In the long run, nominal wages moved in tandem with prices, but did not respond as quickly as the increase in prices. Real wages experienced two substantial falls between the 1620s-1650s and the 1740s-1760s, but remained relatively stable in the remainder of the period examined. Rural-urban wage disparities suggest that the agricultural sector, rather than urban industries, continued to absorb surplus labour. A comparison of wages in Lower Yangzi China and England suggests that the wage gap widens after 1700.

Profits and inequality during an export boom. Evidence from tax records in Lima, Peru

ABSTRACT Some studies have shown that inequality increased in pre-1930 Latin America as the economy and foreign trade grew. Others have shown that there was no clear relationship between economic growth and inequality. The information on nineteenth-century Peru is useful to estimate income inequality during a period of rapid economic growth. This article estimates the distribution of profits in Lima between 1838 and 1859 using information from tax reports. Mobility across social classes was possible for some guild members. However, financiers and large merchants experienced higher growth in profits than artisans and small traders. In addition, a comparison of profits and wages shows that the richest entrepreneurs experienced a rapid increase in profits during a period of declining real wages. Thus, the income gap between the richest and poorest residents of Lima widened during this period.

Wage Structures, Fairness Perceptions, and Job Satisfaction: Evidence from Linked Employer-Employee Data

The paper investigates the impact of firms’ wage structures and workers’ wage fairness perceptions on workers’ well-being. For this purpose, worker and establishment surveys are linked with administrative social security data. Four variables are generated, using approximately half a million worker-year observations, that describe firms’ wage structures and workers’ positions within the wage structures: own absolute wages, internal reference wages within firms, external reference wages, and the wage dispersion in firms. The interrelations between these wage structure variables, workers’ perceived wage fairness, and job satisfaction are then analyzed using regressions. Interpersonal wage comparisons between co-workers in the same firm and across firms as well as wage fairness perceptions are found to be significant determinants of workers’ well-being. The overall findings suggest that equity and social status considerations as well as altruistic preferences towards co-workers and inequality aversion are more important than signal considerations in this context.

A Study on Minimum Wage Comparisons in the World, Especially in Developing Countries

A Study on Minimum Wage Comparisons in the World, Especially in Developing Countries

Does Learning Matter for Wages in Korea? International Comparison of Wage Returns to Adult Education and Training

Does Learning Matter for Wages in Korea? International Comparison of Wage Returns to Adult Education and Training

The state's response to the crisis of neoliberalism: a comparison of the net social wage in China and the United States, 1992-2017

ABSTRACT We compare the welfare states and taxation regimes of the two largest economies in the world, China and the United States, from 1992 to 2017. We begin with a comparison of each country’s net social wage – that is, the difference between total benefits received by and taxes paid by labor – using two established methods. While the net social wage in the two countries exhibited similar trends, the increasing net social wage has distinctly different implications in the two countries due to their specific historical trajectories in the neoliberal era. In the US, the increasing net social wage reflects an ambivalent and reluctant response to workers’ social reproduction. In China, it reflects institutional changes in the welfare state, which we interpret as the Chinese state’s attempt to resolve the social-reproduction crisis caused by neoliberal reforms of the 1990s.

WAGES AND MECHANISM OF ITS PAYMENTS IN UKRAINE AND CANADA: COMPARATIVE ANALYSIS

The article examines and compares the concept and size of wages in Ukraine and Canada. In the course of the research the definition of the term’s “salary” and “wage” according to the labor legislation of Ukraine and Canada was considered. The analysis and comparison of the definition of the concept of wages contained in the regulations governing labor relations in Ukraine and Canada. The author's own vision of the definition of "salary" is given. It is proved that wages and remuneration are essentially different concepts between which it is inappropriate to equate, because wages should be paid to the employee for the work performed by him, that is, in essence, it should be compensatory, and remuneration is just an incentive or compensatory nature, for example, the reward should be considered gratitude for conscientious work or outstanding achievements in professional activities, etc. It is concluded that at the constitutional level the right of a person to remuneration and related opportunities are more specifically and in detail specified in the Constitution of Ukraine in comparison with the Constitution of Canada where it is reduced to a minimum. An analysis of the level of wages in Ukraine and Canada, based on the size of wages, different professions and areas of activity. It is concluded that wages play an important role between the subjects of labor relations in both Ukraine and Canada. It is noted that there is a huge gap between the salaries of workers in Ukraine and Canada. Attention is paid to the comparison of the minimum wage in Ukraine and Canada. It is noted that it is positive to borrow from the experience of Canada forms of remuneration, this would eliminate the shortcoming of the current The Labor Code of Ukraine and the Law of Ukraine "On Remuneration of Labor" in terms of consolidating forms of remuneration. The approach to the procedure for payment of wages at the state level in Ukraine and Canada is analyzed, it is concluded that the content of the rules governing the mechanism of payment of wages in Canada are similar to those contained in the Labor Code of Ukraine and the Law of Ukraine "On Remuneration of Labor", But there are some differences that are positive in nature and bring some flexibility in the regulation of labor relations regarding the legal regulation of wages, which can be borrowed and used in the labor legislation of Ukraine.

Economic inequality and congressional action in the United States: A comparison of the minimum wage and alternative minimum tax

AbstractA central puzzle in American politics is the stark increase in economic inequality since the early 1970s due, in part, to the absence of public policies to address this trend. One explanation is policy drift: Inequality has grown in the United States because the political process has been unresponsive to economic trends toward inequality. A second explanation is unequal political influence: Wealthy individuals and corporations wield superior political influence and tilt public policy toward their interests. We compare these explanations using the federal minimum wage and alternative minimum tax (AMT) from 1969 to 2012 as comparison cases. These policies were both denominated in nominal dollars, so the effect of policy inaction is comparable for both policy domains. We find that (1) the U.S. Congress was much more likely to update AMT policy than minimum wage policy after 1978, (2) Congress protected and increased the real value of the AMT deduction for married couples, whereas the real value of the minimum wage and individual deduction declined after 1978, (3) Congress and the President eventually converted the AMT—but not the minimum wage—to automatic adjustments for inflation. These patterns highlight the role of political inequality in economic policy‐making.

Digitalization of labor: legal and economic frameworks of development

Nowadays, digitalization is a process that affects absolutely all directions of human life, changing it significantly. It’s difficult to imagine our current life without implementation of modern advanced technologies. Creation and implementation of information technologies are used as indicators to evaluate the level and quality of a country's economy and society development. Impact of digital technology development on the economy and on the labour market tendencies is examined in the paper. It’s determined a significant part of Ukraine's economy is developing illegally. On the one hand, the gig economy fosters economic development in the country, but at the same time, it partly provides the development of the illegal – shadow economy. The economic nature of freelance from the legal point of view is analyzed. Different and the most relevant legal forms of labour performance of freelancers are defined in the academic work. The main disadvantages of freelance compared to legal employment are described in the paper. Based on the comparison of the average monthly wage and average monthly income of freelancers, conclusions describe the crucial reasons for freelance development in Ukraine, especially among young people. The current draft bills in the field of labour law in the context of digitalization are analyzed, their positive and negative statements for improving the social and economic freelancers’ welfare are identified. The conclusions determine options related to the improvement of economic and legal policies in order to condemn shadow employment and to ensure proper legal protection for freelancers in Ukraine. The importance of proper labour law is emphasized in the paper. The necessity of legal employment as an opportunity to prevent unfair relationships with the employer is described.

Real Wages of Lithuanian Construction Workers from 1913 to 1939 (Measured in Subsistence and Welfare Ratios) in a Cross-National Comparison

This article provides two comparisons: (1) a cross-time comparison of real wages of skilled and unskilled workers in Kaunas before the First World War and during the interwar period; and (2) a cross-national quantitative comparison of the wages of unskilled workers in Kaunas and the capital cities of most European countries during the same period. For the second comparison, we use the findings of researchers who applied Robert C. Allen’s methodology of real wage estimation. In this methodology, the wages of unskilled construction workers (known in interwar Lithuania as zimagoras) are used as proxies for the wages of unskilled urban workers, and those of construction site carpenters provide a sample for skilled workers’ wages. Real wages are measured in subsistence and welfare ratios, indicating the distances separating the purchasing power of wages from the subsistence level of a single worker (subsistence ratio = 1 meaning absolute poverty) or his family (welfare ratio = 1 meaning absolute poverty). Subsistence or absolute poverty levels are defined by regionally adjusted (to variations in survival needs) minimum consumption baskets. The main findings are: (1) although during the first decade of independence (in the 1920s) the real wages of unskilled construction workers in Kaunas were lower than in 1913, by 1938 they had markedly surpassed the pre-First World War level; (2) in no year with available data did the real wages of unskilled construction workers in Kaunas fall below the absolute poverty level; (3) the real wages of skilled construction workers in Kaunas had markedly surpassed the pre-First World War level even before the Great Depression in the early 1930s, and remained above this level even in the worst years of the depression; (4) the real wages of skilled and unskilled construction workers in Kaunas in 1913 were no lower than in metropolitan centres of the Russian Empire; (5) in the period 1927 to 1929, the wages of unskilled construction workers in Kaunas were lower than in Moscow, but largely surpassed Russian wages in the 1930s, when Stalin’s policy of industrialisation forced them below the subsistence level; (6) the real wages of unskilled construction workers in Kaunas in the 1930s surpassed those in Riga and Tallinn. While this finding is surprising, it concurs with earlier (2007) findings by Gediminas Vaskela, who compared the mean wages of workers and employees in the Baltic countries in the period 1938 to 1940.

The effects of Medicaid expansion on labor market outcomes: Evidence from border counties.

This paper provides new empirical evidence on the employment and earning effects of the recent Medicaid expansion. Unlike most existing studies that use a conventional state and year fixed effects approach, our main identification strategy is based on the comparison of employment and wages in contiguous county-pairs in neighboring states (i.e., border counties) with different Medicaid expansion status. Using the 2008-2016 Quarterly Census of Employment and Wages, we estimate a set of distributed lag models in order to examine the dynamic effects of Medicaid expansion. Results from our preferred specification suggest a statistically significant decrease in total employment of 1.2% 1 year after the expansion of Medicaid. This translates into a 37% decrease in employment among newly eligible Medicaid enrollees under the strong assumption that Medicaid coverage did not crowd out private insurance coverage. We also find that this disemployment effect is transitory: 2 years after the Medicaid expansion employment returns to preexpansion levels. We do not find any statistically significant effect of the Medicaid expansion on wages at any point.

TWO-WAY ENGAGEMENT BETWEEN EMPLOYEE AND EMPLOYER IN CORPORATE ACTIVITIES

The article examines the problem of motivation at the stage of corporate training and advanced training for the development of two-way engagement between employee and employer. The author points out that involvement required from two sides: on behalf of the employee to become more successful, to obtain a result that is objectively measured criteria - the level of wages or the receipt of financial incentives. Involvement on behalf of employer is searching of specific methods and tools, which together will lead to effective motivation of the employee. As the successful operation of such models in the field of material employees' remuneration the article considers foreign experience. Objective criterion - the comparison of wages of foreign countries and Russia allows to make a conclusion that Russia occupies a low position on the level of wages and material incentives is rarely used and is not flexible. In practice, the employer focused on the minimum wage, leaving the incentive part of the wages at their discretion. Thus, developing mechanisms using a model material incentives, the employer motivates employees and potential who have trained for involvement in the work and labour efficiency.

Remuneration and employment in microenterprises

Micro-enterprises and small and medium-sized enterprises are the engine of the Polish economy. They are the main source of employment, arouse entrepreneurial spirit and innova¬tion, and they are essential to increase competitiveness and employment. The aim of this article is to analyze selected data, among others. the level of remuneration and employment in microen¬terprises in Poland and the comparison of wages in micro-entities with average remuneration in the national economy, in the EU and in the USA in 2014-2016. The purpose of the work was sub¬ordinated to the individual parts, in which the essence of the micro enterprise and its importance to the economy were presented, and data on the number of micro-entities, their salaries and their level of employment were presented against the background of selected years.

A Comparison of Wages by Gender and Region of Origin for Newly Arrived Refugees in the USA

The resettlement model supported by the US government aims to help recently arrived refugees achieve economic self-reliance within the first 90 to 180 days of arrival. In addition to the challenges they face in adapting to their new locations, however, refugees enter a US labor market characterized by preexisting wage disparities based on race and gender. Meanwhile, recent changes in US refugee and immigration policies have infused debates over nationalism, Islamophobia, and the economics of resettlement. In this context, it is critical to assess whether refugees face wage discrimination that may affect their ability to become economically self-reliant. Drawing on the International Rescue Committee’s administrative data on refugee resettlement, we examine the extent to which starting wages for newly arrived refugees differ by region of origin and gender. The study found consistent gender pay gaps among the majority of new arrivals. The study also identified lower wages for refugees arriving from sub-Saharan Africa, Latin America, and the Caribbean compared to other regions. These trends suggest a need for more consistent agency monitoring of employment placement, and the development of strategies to ensure more equitable employment outcomes for refugees.

The Foreign Domestic Workers in Singapore, Hong Kong, and Taiwan: Should Minimum Wage Apply to Foreign Domestic Workers?

With the number of foreign domestic workers increasing in different countries around the world, governments have also begun to pay attention to issues related to the rights of foreign domestic workers. This article presents a comparison and analysis of foreign domestic workers employment policies, working conditions, and minimum wage in Singapore, Hong Kong, and Taiwan. We found foreign domestic workers in Asian countries lack access to regular forms of migration and safe migration channels; low wages; long working hours; exploitative working conditions; nonrecognition of domestic work under labor laws, and mistreatment in domestic work conditions. In addition, this article investigates from social welfare, economic, and legal perspectives, the feasibility of applying minimum wage to foreign domestic workers. The results show that foreign domestic workers’ wages should not be decoupled from the minimum wage, and foreign domestic workers should not be treated as a separate group of workers in minimum wage policy. Long-term care systems should incorporate the foreign domestic worker labor pool, which could provide the additional personnel necessary for the nation’s long-term care.

Institutionalization of athletic conferences for wage comparison in collective bargaining in High Schools in the US: A natural experiment

AbstractSocial comparison plays an important role in collective bargaining. However, due to self-serving bias, the bargaining parties rarely agree on appropriate referents. In this respect, Wisconsin teachers’ collective bargaining provides an intriguing case because there is consensus on an appropriate comparison group: the schools’ athletic conferences. The purpose of this study is to examine whether the use of athletic conferences as referents is institutionalized beyond their technical merits. Using conference realignment as a natural experiment, this paper shows that when the bargaining parties experienced conference realignment, they changed their comparison groups. Because this realignment can be regarded as exogenous to collective bargaining, such changes in comparison groups are unlikely to be accounted for by technical factors, thus providing support for institutional theory.

Do informal institutions affect entrepreneurial intentions?

PurposeThe purpose of this paper is to empirically define the ways in which informal institutions influence entrepreneurial intentions. It tests the statement that informal institutions can have an impact on people’s decisions, directly and indirectly, by affecting their perceptions of the external world.Design/methodology/approachThe paper develops a theoretical model of the probability of starting a business by a potential entrepreneur. The model takes into account a comparison of current wages and future profits. The empirical analysis is based on European social survey data at the individual level. Three-stage least squares regression helps to overcome the endogeneity problem since perceptions of government actions are individual specific.FindingsInformal institutions can affect expectations about future activities in a person’s lifetime utility maximisation problem. The paper empirically concludes that these institutions are connected with a person’s satisfaction with government and can indirectly affect the probability to be self-employed.Research limitations/implicationsResearch limitations are related to employing proxies for informal institutions, using only the “satisfaction with government” as a perceptions indicator, and cross-sectional data while defining the causal effect.Practical implicationsPolicymakers should consider that institutional settings affect people in a different manner when developing their policies.Originality/valueThe paper makes a novel contribution by analysing the effect of informal institutions on the probability to start a business by using both theoretical arguments and empirical tests. Building upon insights from a broader informal institutions’ effect on entrepreneurial intentions, this paper is the first to study a linkage between informal institutions and their indirect effect on people’s profit expectations.

Erratum to: Who Benefits Most from a University Degree?: A Cross-National Comparison of Selection and Wage Returns in the US, UK, and Germany

Recent research on economic returns to higher education in the United States suggests that those with the highest wage returns to a college degree are least likely to obtain one. We extend the study of heterogeneous returns to tertiary education across multiple institutional contexts, investigating how the relationship between wage returns and the propensity to complete a degree varies by the level of expansion, differentiation, and cost of higher education. Drawing on panel data and matching techniques, we compare findings from the US with selection into degree completion in Germany and the UK. Contrary to previous studies, we find little evidence for population level heterogeneity in economic returns to higher education.