The Grocery Stores Wage Distribution: A Semi-Parametric Analysis of the Role of Retailing and Labor Market Institutions

Posted: 2 Oct 2000

See all articles by John W. Budd

John W. Budd

University of Minnesota - Twin Cities - Carlson School of Management

Brian P. McCall

University of Minnesota - Twin Cities - Carlson School of Management

Abstract

Using Current Population Survey data supplemented with secondary data sources, this paper analyzes changes in the wage distribution in the U.S. grocery stores industry between 1984 and 1994. In contrast with other industries in which wage inequality has increased, the important change in the grocery stores industry wage distribution is that real wages for the entire distribution have declined. Leveraged buyouts, the threat of increased nonunion competition, and deskilling technology seemingly caused the upper portion of the wage distribution to fall as quickly as the lower. Markets, institutions, and technology did not increase inequality in the grocery stores industry in the 1980s and 1990s ? because these factors were working against both low and high wage workers.

The results also suggest important interrelationships between technology and institutions. Technological change does not appear to have caused a decline in union representation, but has reduced union bargaining power. In the empirical results, the resulting decline in the union wage premium has significant explanatory power for the declining grocery stores real wage trend. Thus, technological change appears significant for this industry, but it is not a skill-biased change in the positive direction as is normally posited in the wage inequality literature.

JEL Classification: J31, J51

Suggested Citation

Budd, John W. and McCall, Brian P., The Grocery Stores Wage Distribution: A Semi-Parametric Analysis of the Role of Retailing and Labor Market Institutions. Industrial and Labor Relations Review. Available at SSRN: https://ssrn.com/abstract=237561

John W. Budd (Contact Author)

University of Minnesota - Twin Cities - Carlson School of Management ( email )

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Center for Human Resources and Labor Studies
Minneapolis, MN 55455
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HOME PAGE: http://www.johnwbudd.com

Brian P. McCall

University of Minnesota - Twin Cities - Carlson School of Management ( email )

19th Avenue South
Minneapolis, MN 55455
United States

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