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Low-wage Lessons

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  • John Schmitt

Abstract

Over the last two decades, high – and, in some countries, rising – rates of low-wage work have emerged as a major political concern. If low-wage jobs act as a stepping stone to higher-paying work, then even a relatively high share of low-wage work may not be a serious social problem. If, however, as appears to be the case in much of the wealthy world, low-wage work is a persistent and recurring state for many workers, then low-wages may contribute to broader income and wealth inequality and constitute a threat to social cohesion. This report draws five lessons on low-wage work from the recent experiences of the United States and other rich economies in the OECD.

Suggested Citation

  • John Schmitt, 2012. "Low-wage Lessons," CEPR Reports and Issue Briefs 2012-03, Center for Economic and Policy Research (CEPR).
    • Handle: RePEc:epo:papers:2012-03
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    References listed on IDEAS

    as
    1. Jeannette Wicks-Lim & Jeffrey Thompson, 2010. "Combining Minimum Wage and Earned Income Tax Credit Policies to Guarantee a Decent Living Standard to All U.S. Workers," Published Studies peri_mw_eitc_oct2010, Political Economy Research Institute, University of Massachusetts at Amherst.
    2. Jesse Rothstein, 2010. "Is the EITC as Good as an NIT? Conditional Cash Transfers and Tax Incidence," American Economic Journal: Economic Policy, American Economic Association, vol. 2(1), pages 177-208, February.
    3. Jérôme Gautié & Schmitt John, 2010. "Low-Wage Work in the Wealthy World," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00464352, HAL.
    4. Kartik B. Athreya & Devin Reilly & Nicole B. Simpson, 2010. "Earned income tax credit recipients: income, marginal tax rates, wealth, and credit constraints," Economic Quarterly, Federal Reserve Bank of Richmond, vol. 96(3Q), pages 229-258.
    5. Eissa, Nada & Hoynes, Hilary, 2011. "Redistribution and Tax Expenditures: The Earned Income Tax Credit," National Tax Journal, National Tax Association;National Tax Journal, vol. 64(2), pages 689-729, June.
    6. Leigh Andrew, 2010. "Who Benefits from the Earned Income Tax Credit? Incidence among Recipients, Coworkers and Firms," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-43, May.
    7. Rebecca Ray & Janet C. Gornick & John Schmitt, 2008. "Parental Leave Policies in 21 Countries: Assessing Generosity and Gender Equality," CEPR Reports and Issue Briefs 2008-23, Center for Economic and Policy Research (CEPR).
    8. John Schmitt, 2009. "Inequality as Policy: The United States Since 1979," CEPR Reports and Issue Briefs 2009-40, Center for Economic and Policy Research (CEPR).
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    low-wage; minimum wage; EITC; unions;
    All these keywords.

    JEL classification:

    • J - Labor and Demographic Economics
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J8 - Labor and Demographic Economics - - Labor Standards
    • J88 - Labor and Demographic Economics - - Labor Standards - - - Public Policy
    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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