Do Large Modern Retailers Pay Premium Wages?

Brianna Cardiff-Hicks, Francine Lafontaine () and Kathryn Shaw

No 20313, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: With malls, franchise strips and big-box retailers increasingly dotting the landscape, there is concern that middle-class jobs in manufacturing in the U.S. are being replaced by minimum wage jobs in retail. Retail jobs have spread, while manufacturing jobs have shrunk in number. In this paper, we characterize the wages that have accompanied the growth in retail. We show that wage rates in the retail sector rise markedly with firm size and with establishment size. These increases are halved when we control for worker fixed effects, suggesting that there is sorting of better workers into larger firms. Also, higher ability workers get promoted to the position of manager, which is associated with higher pay. We conclude that the growth in modern retail, characterized by larger chains of larger establishments with more levels of hierarchy, is raising wage rates relative to traditional mom-and-pop retail stores.

JEL-codes: J00 J24 J3 L25 L81 (search for similar items in EconPapers)
Date: 2014-07
New Economics Papers: this item is included in nep-lab, nep-lma and nep-ure
Note: LS
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Citations: View citations in EconPapers (3)

Published as Brianna Cardiff-Hicks & Francine Lafontaine & Kathryn Shaw, 2015. "Do Large Modern Retailers Pay Premium Wages?," ILR Review, Cornell University, ILR School, vol. 68(3), pages 633-665, May.

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