Solidarity Within and Across Workplaces: How Cross-Workplace Coordination Affects Earnings Inequality

an article by Nathan Wilmers (MIT Sloan School of Management, USA) published in RSF: The Russell Sage Foundation Journal of the Social Sciences Volume 5 Issue 4 (September 2019)

Abstract

The post–World War II period of wage compression provides a strong contrast to the last forty years of rising inequality.

In this article, I argue that inequality was previously constrained by pay coordination that spanned multiple workplaces. Cross-workplace coordination practices range from multi-employer bargaining agreements to informal employer collusion.

To quantify the influence of these practices on inequality, I draw on establishment-level Bureau of Labor Statistics microdata from 1968 to 1977. Inequality between workplaces did not increase during the 1970s and inequality was lower among workers likely to be covered by cross-workplace coordination.

Unionization, large establishments, and pension provision reduced inequality across workplaces, not only among coworkers within workplaces. These findings indicate that cross-workplace coordination mitigated inequality during the postwar period of egalitarian economic growth.

Full text (PDF 26pp)

Hazel’s comment
Despite this research being based in the USA I believe that it is also relevant to the UK starting as it does by telling us that the inequality gap is growing with the rich getting richer.

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