Episode 26

What happens when big companies increase wages? -- with Ellora Derenoncourt


February 16th, 2022

25 mins 46 secs

Season 2

Your Host

About this Episode

In recent years, decreasing federal minimum wage, low unionization rates and growing outsourcing trends have had some important effects on wage growth in the US low wage sector. As major firms throughout the world come under scrutiny for their failure to compensate their workers fairly, it is becoming increasingly necessary to better understand what motivates companies to mirror other larger firms’ wage changes. In this episode, Ellora Derenoncourt explains that when it comes to wage changes, just a few large employers in the labor market can have substantial ripple effects. Using the examples of firms like Amazon, Walmart and Target, she looks at why some companies feel compelled to follow in the footsteps of larger actors.

Working Paper:
“Spillover effects from voluntary employer minimum wages”, with Clemens Noelke, David Weil & Bledi Taska

“On the Clock: What Low Wage Work Did to Me and How It Drives America Insane” (2019), by Emily Guendelsberger