🚨New paper🚨 Workers' wages are taxed by employers who violate their rights, & this tax is regressive. A 10% wage increase is associated with a 4% decrease in labor violation fines per $ of pay. With @aaronsojourner @qiuyueruc. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3673495 1/7 Violation intensity map
We use labor violations enforced by federal agencies from @GoodJobsFirst. We measure violation intensity at the local industry level (NAICS4 by CZ), dividing violation counts by employment, and penalty amounts by the wage bill. 2/7
To validate these measures, we use the 2015 American Working Conditions Survey. Higher levels of labor-rights violations correlate positively with worker reports of abuse on the job, bad bosses, bad workplaces, exposure to physical risks, & last-minute schedule changes. 3/7
Using a panel regression, we find that a 10% increase in industry-CZ pay is associated with a 0.15% decrease in the number of violations per employee & a 4% decrease in fines per $ of payroll. Thus, violations of workers’ rights reenforce wage #inequality. 4/7
Increased unionization is associated with a lower prevalence of labor rights violations. This is consistent with worker power decreasing violations. 5/7
Increased labor market concentration -- which should reduce worker bargaining power -- increases labor violation intensity, but only when using instrumental variables 6/7.
Overall, we conclude that #inequality in job quality as measured by labor-rights violations exacerbates wage inequality in the U.S. The labor violation wage tax imposed by employers is regressive. Lower worker power goes hand in hand with higher violations of labor rights. 7/7
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