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Beyond Wages: Job Amenities and Worker Bargaining Power

Saturday, November 15, 1:45 to 3:15pm, Property: Grand Hyatt Seattle, Floor: 1st Floor/Lobby Level, Room: Princess 1

Session Submission Type: Panel

Abstract

Although previous research has emphatically shown that workers experience stronger and more equitable wage growth when labor demand strengthens, such as when policymakers' actions contribute to a tight labor market, far less is known about how job quality changes, or the tradeoffs workers experience between wages and specific job amenities under changing labor market conditions. In large part, this lacuna is a result of few data sources jointly capturing wages, amenities, and changing labor demand in a way that allows estimation of causal relationships. This panel features three papers that use new data sources and methods to examine how workers value specific job amenities, relative to wages, and how tight labor markets can affect worker utility along margins beyond just wages.

The first paper, "Local Labor Market Tightness and Job Quality," uses novel data from the Federal Reserve Board's Survey of Household Economics and Decisionmaking (SHED) to estimate how multiple measures of local labor market tightness affects within-worker changes in multiple dimensions of job quality, including finding the work interesting, work-life balance, opportunities for advancement, and perceived autonomy (as well as pay). Preliminary results show that a 10 percent increase in vacancies per capita is associated with a 12 percent increase in the likelihood of changing jobs and a 17.5 percent increase in the likelihood of moving to an overall better job. These results suggest that labor market tightness not only improves worker pay, in line with earlier studies, but also several job amenities more broadly, and these effects vary across different groups of workers, with distributional consequences in overall worker wellbeing.

The second paper, "Job Amenities & Earnings Inequality," brings new techniques to bear in investigtaing the tradeoff between wages and job amenities (and shedding light on "compensating wage differentials"). Using a proxy variable approach for worker's total-compensation offer sets derived from utility theory, occupation-specific job amenities from O*Net, and detailed panel data of workers from multiple sources, the paper estimates the tradeoff frontier between wages and specific amneities for different contours of offer sets. The paper further shows that roughly two-thirds of the gender pay gap can be explained by the amenities inherent across different occupations, although differing amenities explain little of the wage inequality across race/ethnicity or socioeconomic background.

The third paper, "Will I Ever Be Satisfied? Job Quality and Unionization," studies how job quality relates to unionization efforts. Using data from both the NLRB and Glassdoor, the paper documents that establishments where job quality has declined (even within the same firm) are more likely to see unionization efforts, and this relationship is stronger for declines in work culture, management, and work-life balance than it is for pay. Thus suggests that poor job quality, even more than poor pay, precipitates unionization efforts. Moreover, although successful unionization reduces employee turnover (and pay), it does not lead to large improvements in job amenities.

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