The Role of Between-Workplace Segregation in Ethnoracial Benefits Inequalities

• In Event: Organizational Drivers of Economic Inequality (Co-sponsored by Inequality, Poverty, and Mobility Section)

Abstract

For every three dollars paid in wages and salaries in the US, employers pay a further dollar for workers’ fringe benefits like health insurance, retirement and pension plans, and Social Security and Medicare contributions. This component of labor compensation is often unobserved in studies of ethnoracial pay inequalities. The literature that does consider racial benefits gaps is mostly based on surveys of individual workers. But what about the role of the "employer" in "employer-provided benefits"? This paper describes whether minoritized workers are segregated into workplaces that compensate employees with lower levels of fringe benefits than those where comparable workers racialized as white are employed. We conceptualize benefits provision as following from organizational processes, and document organizational heterogeneity in benefits levels using restricted access microdata from the Census Bureau covering US manufacturing, 2000-2021. We ask whether black, Latino, Native American, and Asian workers are found in lower-benefits workplaces than comparable white workers, and how these differentials have changed over time. Our contribution is to move beyond individual- and towards organization-level explanations for the relationships between race-ethnicity and benefits. We theorize and evaluate the potential roles of organizational formalization, ability to pay, and low vs. high road accumulation and management strategies in affecting the conditional associations between ethnoracial group and workplace benefits level, over and above segregation across industries and place and individual characteristics. Results indicate the importance of nonwage compensation in the organization of racialized inequality between workers.

Authors

• Matt Mendoza, Columbia University

• Tali Kristal, University of Haifa