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Why American Older Workers Have Lost Bargaining Power

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Abstract

The bargaining power of workers cannot be measured directly, but it can be inferred from working conditions and institutional factors. This study documents the stagnation in older workers’ wages and the seven reasons older workers have lost bargaining power. Five factors relate to monopsony exposure from eroding retirement income security, union loss, more insecure employment relationships, persistent age discrimination, and geographical immobility. Two additional factors -- older workers' ineligibility for the Earned Income Tax Credit (EITC); and older workers’ relative propensity to work for smaller firms – also weaken bargaining power. Significant loss of bargaining power of workers over age 55 who are projected to fill 6.4 million of the 11.4 million net new jobs created between 2016 and 2026 could suppress wages and working conditions for all workers.

Suggested Citation

  • Teresa Ghilarducci & Aida Farmand, 2019. "Why American Older Workers Have Lost Bargaining Power," SCEPA working paper series. SCEPA's main areas of research are macroeconomic policy, inequality and poverty, and globalization. 2019-01, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
  • Handle: RePEc:epa:cepawp:2019-02
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Will the US Pandemic Response Strengthen Workers?
      by Teresa Ghilarducci in Project Syndicate on 2020-03-25 11:37:27

    More about this item

    Keywords

    working conditions; wages; bargaining power;

    JEL classification:

    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy

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