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The Grocery Stores' Wage Distribution: A Semi-Parametric Analysis Of The Role Of Retailing And Labor Market Institutions

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  • Budd, John W.
  • McCall, Brian P.

Abstract

How and why has the wage distribution in U.S. grocery stores changed between 1984 and 1994? Unlike other industries in the time period, the important change in the wage distribution is not rising inequality, but the real wages fell across the entire wage distribution. Changes in labor market institutions explain more than half of the change in the wage distribution in grocery stores. Specifically, the decline in the real value of the minimum wage explains little of the decline in the mean real wage but much of the change in the shape of the distribution between 1984 and 1994, and 95 percent of the decline at the lowest 10th percentile. The decline in union coverage in grocery stores and the narrowing of the union-nonunion wage gap explains much of the decline above the 25th percentile. A third institutional change, the use of part-time employees, is not associated with the changes in grocery industry wage outcomes. One might think that the major changes in operation and technologies that occurred during this time period are at least contributing factors, but we find quite the contrary. If average store size, weekly operating hours, and the use of scanning technology had remained at their 1984 levels, the real wage decline would have been even greater than that actually seen, and for the entire wage distribution. Changes in grocery retailing prevented and even greater decline in real wages. Again unlike many other industries, skill-biased technological change does not appear important for grocery industry wage outcomes. The basis of our analysis is a statistical technique which combines nonparametric kernel density estimation with a parametric re-weighting, applied to Current Population Survey data supplemented with secondary data sources on the Grocery industry.

Suggested Citation

  • Budd, John W. & McCall, Brian P., 1999. "The Grocery Stores' Wage Distribution: A Semi-Parametric Analysis Of The Role Of Retailing And Labor Market Institutions," Working Papers 14347, University of Minnesota, The Food Industry Center.
    • Handle: RePEc:ags:umrfwp:14347
    DOI: 10.22004/ag.econ.14347
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    1. Budd, John W. & McCall, Brian P., 1999. "Decomposing Changes In Retail Food Wage Distributions, 1983-1998: A Semi-Parametric Analysis," Working Papers 14327, University of Minnesota, The Food Industry Center.
    2. Emek Basker, 2012. "Raising the Barcode Scanner: Technology and Productivity in the Retail Sector," NBER Chapters,in: Standards, Patents and Innovations National Bureau of Economic Research, Inc.
    3. Richard J. Butler & Gene Lai, 2023. "Insurance wage-offer disparities by gender: random forest regression and quantile regression evidence from the 2010–2018 American Community Surveys," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 48(2), pages 192-229, September.
    4. Emek Basker, 2012. "Raising the Barcode Scanner: Technology and Productivity in the Retail Sector," American Economic Journal: Applied Economics, American Economic Association, vol. 4(3), pages 1-27, July.
    5. Cho, Seung Jin & Lee, Jun Yeong & Winters, John V., 2020. "COVID-19 Employment Status Impacts on Food Sector Workers," ISU General Staff Papers 202006080700001107, Iowa State University, Department of Economics.
    6. Richard Volpe, 2014. "Supercenters, Unionized Labor, and Performance in Food Retail," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 53(2), pages 325-355, April.
    7. Busso, Matias & DiNardo, John & McCrary, Justin, 2009. "New Evidence on the Finite Sample Properties of Propensity Score Matching and Reweighting Estimators," IZA Discussion Papers 3998, Institute of Labor Economics (IZA).

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    Agribusiness; Labor and Human Capital;

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