Does Labor Activism Raise Wages?

• In Event: How Minimum Wages Work: Activism, Organizational Responses, and Worker Outcomes

Abstract

Researchers have long suggested that wage norms and social movement pressure can affect macro-level labor market inequality. Growing wage inequality has prompted renewed interest in whether labor activism can raise wages at the bottom, but identifying causal effects of activism on wages has proven difficult.

We study these issues with the Fight for $15 (FF15) movement, a union-funded advocacy campaign against low wages that launched in New York City in 2012 and spread across dozens of cities by 2016. The central question is whether and how FF15 raised wages, and specifically whether effects operated through policy change via minimum wage legislation or through shifts in workplace norms and employer behavior. We track local FF15 activism intensity across cities using Google Trends data on search interest, validated against documented strike locations, and combine this with wage data from the Occupational Employment and Wage Statistics (OEWS) and the Current Population Survey (CPS), alongside detailed data on state and local minimum wage legislation.

We estimate causal effects using a local projections difference-in-differences design, exploiting the fact that the Service Employees International Union (SEIU), which funded the campaign, directed resources toward cities where it had pre-existing organizational strength rather than where wage pressure was highest. Because campaign placement reflected internal union politics rather than local labor market conditions, this variation isolates the causal effect of FF15 campaigns from pre-existing differences across cities.

Cities with Fight for $15 campaigns had more wage growth at the bottom following the campaigns. This wage growth is accounted for by state and local statutory minimum wage increases. In a series of supplementary analyses, we find no evidence that FF15 cities saw larger shifts in worker expectations or employer practices over and above the statutory minimum increases.The analysis demonstrates that labor activism can succeed at changing the wage structure through policy change, even without localized norm shifts. Securing minimum wage legislation, rather than shifting employer norms or worker expectations, appears to be the primary mechanism through which contemporary labor organizing translates worker pressure into material wage gains.

Author

• Nathan Wilmers
  Presenting Author