Project Summary

Nathan Wilmers completed this research for his dissertation titled "The New Economic Segmentation: Work, Inequality, and Market Power."  This dissertation considers how changes in organizations and product markets contributed to rising earnings inequality and wage stagnation since the 1970s.

The first chapter investigates the product market context in which employers impose wage pressure on workers.  Employers in industries that used to provide relatively high-paying jobs for workers without a college degree, like manufacturing, warehousing and transportation, have become increasingly reliant on sales to large corporate buyers.  These buyers pressure their suppliers to lower their prices and wages.  This effective pressure undermines the organizational pay premiums that workers in these sectors would otherwise enjoy.  Increased buyer power explains around 10% of wage stagnation since the 1970s.

The second chapter zooms in on within-organization processes to consider the effects of job reorganization on earnings inequality.  Wilmers finds that when tasks are more divided across high- and low-paying positions, within-organization earnings inequality increases.  This increased inequality results both from less mixing of higher and lower paid tasks across jobs and from lower earnings stemming from job homogeneity.

Finally the third chapter considers the effects of workers’ earnings growth of the changing role played by organizations in worker mobility.  Since at least the early 1990s, there has been a decline in the rate between-employer job switching among workers.  Job mobility inside organizations has held steady.  As such, a growing proportion of job mobility happens inside firms.


Intellectual Merit

Wilmers finds that increased inequality since the 1970s stems in part from a changing organizational and product market context.  Each study in the dissertation examines wage setting in a context in which rules and norms no longer shield workers from dislocation and wage pressure as they once did.  Insofar as deviations from competitive labor market wages still affect the wage structure, it is often in the direction of lower and less equal wages: jobs can be transformed, workers dislocated, and real wages lowered.  Despite this changed context, the dissertation demonstrates the continued relevance of sociological approaches to the labor market.  Returning to dual labor market theory, internal labor markets and labor process theory--sociological approaches to labor markets that have been largely dormant since the 1980s--allows new predictions about the wage effects of market power, the organizational setting of worker mobility and the inequality implications of constructing jobs out of tasks.  By testing these theories in a context of substantially different employment relations, several problems with these approaches are clarified: for example, the importance of buyer, not just seller, product market power in wage determination and the polarizing, rather than purely deskilling, effects of task distillation. 

Broader Impacts

Wilmers disseminated these findings at the American Sociological Association annual meeting; the Economic Sociology/Organizations, Occupations and Work mini-conference, the Academy of Management annual meeting and the RC28 Social Stratification and Mobility ummer meeting.  Results from one chapter of the dissertation have been published in the American Sociological Review and covered by the Boston Globe and the Washington Center for Equitable Growth's Equitablog.

Last Modified: 07/02/2018
Modified by: Nathan Wilmers