Unions, Norms, and the Rise in U.S. Wage Inequality
TL;DR: This article found that the decline of organized labor explains a fifth to a third of the growth in inequality, an effect comparable to the growing stratification of wages by education, and that unions helped institutionalize norms of equity, reducing the dispersion of nonunion wages in highly unionized regions and industries.
Abstract: From 1973 to 2007, private sector union membership in the United States declined from 34 to 8 percent for men and from 16 to 6 percent for women. During this period, inequality in hourly wages increased by over 40 percent. We report a decomposition, relating rising inequality to the union wage distribution’s shrinking weight. We argue that unions helped institutionalize norms of equity, reducing the dispersion of nonunion wages in highly unionized regions and industries. Accounting for unions’ effect on union and nonunion wages suggests that the decline of organized labor explains a fifth to a third of the growth in inequality—an effect comparable to the growing stratification of wages by education.
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TL;DR: In this article, the authors examine the connection between financialization and rising income inequality and find that increasing dependence on financial income, in the long run, is associated with reducing labor's share of income, increasing top executives' share of compensation, and increasing earnings dispersion among workers.
Abstract: Focusing on U.S. nonfinance industries, we examine the connection between financialization and rising income inequality. We argue that the increasing reliance on earnings realized through financial channels decoupled the generation of surplus from production, strengthening owners’ and elite workers’ negotiating power relative to other workers. The result was an incremental exclusion of the general workforce from revenue-generating and compensation-setting processes. Using time-series cross-section data at the industry level, we find that increasing dependence on financial income, in the long run, is associated with reducing labor’s share of income, increasing top executives’ share of compensation, and increasing earnings dispersion among workers. Net of conventional explanations such as deunionization, globalization, technological change, and capital investment, the effects of financialization on all three dimensions of income inequality are substantial. Our counterfactual analysis suggests that financial...
343 citations
TL;DR: In this paper, the authors focus on cultural processes that contribute to the production and reproduction of inequality through the routine and taken-for-granted actions of both dominant and subordinate actors, and highlight two types of cultural processes: identification and rationalization.
Abstract: Thispaperprovidesaframeworkforunderstandingthewaysinwhichsocialprocesses produce social inequality. Specifically, we focus on a particular type of social process that has received limited attention in the literature and in which inter-subjective meaning-making is central: cultural processes. Much of the literature on inequality has focused on the actions of dominant actors and institutions in gaining access to material and non-material resources, or on how ecological effects cause unequal access to material resources. In contrast, we focus on processes that contribute to the production (and reproduction) of inequality through the routine and takenfor-granted actions of both dominant and subordinate actors. We highlight two types of cultural processes: identification and rationalization. We describe and illustrate four processes that we consider to be significant analytical exemplars of these two types of cultural processes: racialization and stigmatization (for identification) and standardization and evaluation (for rationalization). We argue that attention to such cultural processes is critical and complementary to current explanations of social inequality.
322 citations
Cites background from "Unions, Norms, and the Rise in U.S...."
...…on inequality would also require a discussion of the macro-sociological and macro-economic literature on institutional dynamics such as union decline, technological change or globalization, and how they have exacerbated inequality over the last few decades (see e.g. Western and Rosenfeld, 2011)....
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TL;DR: Elites are those with vastly disproportionate control over or access to a resource, such as economic, social, cultural, political, or knowledge capital as mentioned in this paper, and the role of institutions such as schools, families, and clubs in how such resources are organized and distributed.
Abstract: Elites are those with vastly disproportionate control over or access to a resource. We can understand this as a position that a social actor occupies, or we can imagine such resources as a possession of an actor. The study of elites is the study of power and inequality, from above. It involves looking at the distribution of social resources, which can include economic, social, cultural, political, or knowledge capital. It also means exploring the role of institutions such as schools, families, and clubs in how such resources are organized and distributed. Over the past decade, particularly as social power and economic rewards have become increasingly concentrated in the hands of the few, elite sociology has experienced a revival. Empirical observations of these phenomena point to the changing character of American inequality.
291 citations
Book•
24 Jan 2017
TL;DR: The "Four Horsemen" of leveling-mass-mobilization warfare, transformative revolutions, state collapse, and catastrophic plagues-have repeatedly destroyed the fortunes of the rich as discussed by the authors.
Abstract: Are mass violence and catastrophes the only forces that can seriously decrease economic inequality? To judge by thousands of years of history, the answer is yes. Tracing the global history of inequality from the Stone Age to today, Walter Scheidel shows that it never dies peacefully. The Great Leveler is the first book to chart the crucial role of violent shocks in reducing inequality over the full sweep of human history around the world. The "Four Horsemen" of leveling-mass-mobilization warfare, transformative revolutions, state collapse, and catastrophic plagues-have repeatedly destroyed the fortunes of the rich. Today, the violence that reduced inequality in the past seems to have diminished, and that is a good thing. But it casts serious doubt on the prospects for a more equal future. An essential contribution to the debate about inequality, The Great Leveler provides important new insights about why inequality is so persistent-and why it is unlikely to decline anytime soon.
278 citations
Cites background from "Unions, Norms, and the Rise in U.S...."
...U.S. unionization rates and wage dispersion: Western and Rosenfeld 2011....
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TL;DR: This article reviewed the literature on recent changes to US employment relationships, focusing on the causes of those changes and their consequences for inequality, and examined how these changes have affected inequality by influencing the distribution of rewards within organizations (via changes in the determination of pay and benefits and in the allocation of workers to jobs) and how rewards are distributed among different stakeholders.
Abstract: We review the literature on recent changes to US employment relationships, focusing on the causes of those changes and their consequences for inequality. The US employment model has moved from a closed, internal system to one more open to external markets and institutional pressures. We describe the growth of short-term employment relationships, contingent work, outsourcing, and performance pay as well as the success of social identity movements in shaping employment benefits. In doing so, we address the role of organizations as sites of conflict within and between stakeholder groups, examining how struggles among stakeholders have contributed to reorganizing employment relationships. We also examine how these changes have affected inequality by (i) influencing the distribution of rewards within organizations (via changes in the determination of pay and benefits and in the allocation of workers to jobs) and (ii) altering, on a macro level, how rewards are distributed among different stakeholders. In closi...
206 citations
Cites background from "Unions, Norms, and the Rise in U.S...."
...Western and Rosenfeld (2011) also find a strong association between local industry unionization levels and wage inequality, arguing that unions impose norms of equity on the labor market....
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References
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Book•
01 Jan 1878
TL;DR: The Red River of the North basin of the Philippines was considered a part of the Louisiana Purchase by the United States Department of Commerce in the 1939 Census Atlas of the United Philippines as discussed by the authors.
Abstract: 1 Includes drainage basin of Red River of the North, not a part of any accession, but in the past sometimes considered a part of the Louisiana Purchase. i Includes Baker, Canton, Enderbury, Rowland, Jarvis, Johnston, and Midway Islands; and also certain other outlying islands (21 square miles). 3 Commonwealth of the Philippines, Commission of the Census; 1939 Census, Census Atlas of the Philippines. Source: Department of Commerce, Bureau of the Census.
10,650 citations
Book•
28 Mar 2001
TL;DR: In this paper, the key to the institutional system of the 19 century lay in the laws governing market economy, which was the fount and matrix of the system was the self-regulating market, and it was this innovation which gave rise to a specific civilization.
Abstract: But the fount and matrix of the system was the self-regulating market. It was this innovation which gave rise to a specific civilization. The gold standard was merely an attempt to extend the domestic market system to the international field; the balance of power system was a superstructure erected upon and, partly, worked through the gold standard; the liberal state was itself a creation of the self-regulating market. The key to the institutional system of the 19 century lay in the laws governing market economy. (p. 3).
8,514 citations
TL;DR: The authors showed that the large shocks that capital owners experienced during the Great Depression and World War II have had a permanent effect on top capital incomes and argued that steep progressive income and estate taxation may have prevented large fortunes from fully recovering from these shocks.
Abstract: This paper presents new homogeneous series on top shares of income and wages from 1913 to 1998 in the United States using individual tax returns data. Top income and wages shares display a U-shaped pattern over the century. Our series suggest that the large shocks that capital owners experienced during the Great Depression and World War II have had a permanent effect on top capital incomes. We argue that steep progressive income and estate taxation may have prevented large fortunes from fully recovering from these shocks. Top wage shares were flat before World War II, dropped precipitously during the war, and did not start to recover before the late 1960s but are now higher than before World War II. As a result, the working rich have replaced the rentiers at the top of the income distribution.
3,263 citations
"Unions, Norms, and the Rise in U.S...." refers background in this paper
...Incomes greatly increased in the top percentile since the 1990s, a trend measured by administrative rather than survey data (Piketty and Saez 2003)....
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TL;DR: The food riot in eighteenth-century England is concerned in this article, where the common people can scarcely be taken as historical agents before the French Revolution. But this view can conceal what may be described as a spasmodic view of popular history.
Abstract: WE HAVE BEEN WARNED IN RECENT YEARS, BY GEORGE RUDE AND OTHERS, against the loose employment of the term \"mob\". I wish in this article to extend the warning to the term \"riot\", especially where the food riot in eighteenth-century England is concerned. This simple four-letter word can conceal what may be described as a spasmodic view of popular history. According to this view the common people can scarcely be taken as historical agents before the French Revolution. Before this period they intrude occasionally and
3,206 citations
"Unions, Norms, and the Rise in U.S...." refers background in this paper
...We often think of the moral economy historically—determining, for example, fair prices for bread and flour under the British Corn Laws (Thompson 1971) or the relative rank and standing of English workers in the nineteenth century (Polanyi [1944] 1957).1 Unions are pillars of the moral economy in modern labor markets....
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...Thompson (1971) coined the term “moral economy.”...
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...We often think of the moral economy historically—determining, for example, fair prices for bread and flour under the British Corn Laws (Thompson 1971) or the relative rank and standing of English workers in the nineteenth century (Polanyi [1944] 1957).1 Unions are pillars of the moral economy in…...
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