Wage Inequality and Labor Rights Violations
Wage inequality does not fully capture differences in job quality. Jobs also differ along other key dimensions, including the prevalence of labor rights violations. We construct novel measures of labor violation rates using data from federal agencies. Within local industries over time, a 10% increase in the average wage is associated with a 0.15% decrease in the number of violations per employee and a 4% decrease in fines per dollar of pay. Reduced labor market concentration and increased union coverage rate are also associated with reductions in labor violations. Overall, labor violations are regressive: they increase inequality in job quality.
Thanks to Philip Mattera of Good Jobs First for leading construction of the Violation Tracker database. For helpful comments and discussions, we thank Alexander Hertel-Fernandez, Suresh Naidu, David Weil and participants at 2021 ASSA. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.