Do Large Modern Retailers Pay Premium Wages?

Brianna Cardiff-Hicks, Francine Lafontaine () and Kathryn Shaw
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Kathryn Shaw: Brianna Cardiff-Hicks is an Associate at Cornerstone Research. Francine Lafontaine is the William Davidson Professor of Business Economics and Public Policy in the Ross School of Business, University of Michigan. Kathryn Shaw is the Ernest C. Arbuckle Professor of Economics in the Graduate School of Business, Stanford University.

ILR Review, 2015, vol. 68, issue 3, 633-665

Abstract: With malls, franchise strips, and big-box retailers increasingly dotting the landscape, many are concerned that U.S. middle-class jobs in manufacturing are being replaced by minimum-wage jobs in retail. Retail jobs have spread, whereas manufacturing jobs have shrunk in number. The authors show that wage rates in the retail sector rise markedly with firm size and with establishment size. These increases are halved when they control for worker fixed effects, suggesting that better workers are sorted into larger firms. Also, higher-ability workers are promoted to the position of manager, which is associated with higher pay. The authors 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.

Keywords: retail wages; firm size effects on wages; modern retail firms; large retail pay (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (9)

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Working Paper: Do Large Modern Retailers Pay Premium Wages? (2014)
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