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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. 2019-02, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
  • Handle: RePEc:epa:cepawp:2019-02
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    References listed on IDEAS

    as
    1. Teresa Ghilarducci & Michael Papadopoulos & Anthony Webb, 2018. "The Growth of Unstable and Low-Wage Work Among Older Workers," SCEPA policy note series. 2018-03, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
    2. David Autor & David Dorn & Lawrence F Katz & Christina Patterson & John Van Reenen, 2020. "The Fall of the Labor Share and the Rise of Superstar Firms [“Automation and New Tasks: How Technology Displaces and Reinstates Labor”]," The Quarterly Journal of Economics, Oxford University Press, vol. 135(2), pages 645-709.
    3. Henry Hyatt & Erika McEntarfer & Ken Ueda & Alexandria Zhang, 2016. "Interstate Migration and Employer-to-Employer Transitions in the U.S.: New Evidence from Administrative Records Data," Working Papers 16-44, Center for Economic Studies, U.S. Census Bureau.
    4. Robert L. Clark & Steven Nyce & Beth Ritter & John B. Shoven, 2019. "Employer Concerns and Responses to an Aging Workforce," NBER Working Papers 25572, National Bureau of Economic Research, Inc.
    5. Matthew J. Bidwell, 2013. "What Happened to Long-Term Employment? The Role of Worker Power and Environmental Turbulence in Explaining Declines in Worker Tenure," Organization Science, INFORMS, vol. 24(4), pages 1061-1082, August.
    6. J. R. Hicks, 1963. "The Theory of Wages," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-00189-7.
    7. Bruce E. Kaufman, 2007. "The impossibility of a perfectly competitive labour market," Cambridge Journal of Economics, Oxford University Press, vol. 31(5), pages 775-787, September.
    Full references (including those not matched with items on IDEAS)

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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

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    More about this item

    Keywords

    working conditions; wages; bargaining power;
    All these keywords.

    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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