The Effects of Public, Private and Social Institutions on Wages: An Exploratory Study

For an increasing proportion of workers—whether in standard employment or fissured, non- standard work—compensation, access to benefits, ability to exercise voice at work, and treatment at the workplace have worsened over recent decades. The restructuring of businesses (fissuring) has shifted activities from large firms to other entities, contributing to the decline in the quality of work, particularly for less-skilled and low-wage workers. This restructuring has shifted internal wage and salary decisions away from single employers to multiple players in multiple markets. Given the diminishing role of the federal government and the decline in unionization, countering the effects of fissuring requires new approaches. Recent wage policies and reform efforts by labor market actors present some natural experiment opportunities to evaluate the extent to which private and public decisions to raise wages affect local labor markets more broadly.

Economists David Weil, Clemens Noelke and Ellora Derenoncourt propose to exploit shocks to the wages of some workers in a local labor market due to the actions of a major employer, a government contracting organization and a worker advocacy group. Specifically, the PIs will test the spillover effects of Walmart’s company-wide minimum wage and managerial salary increases; Amazon’s company-wide minimum wage increase; Executive Order 13658 increasing the minimum wage paid to workers with certain types of federal contractors; and the Fight for $15 movement on the wage rates set by other employers in relevant occupations and industries.