The Wages of Care: Bargaining Power, Earnings and Inequality

by: Nancy Folbre, Kristin Smith

February 17, 2017 |
Working Paper

Nancy Folbre and coauthor Kristin Smith look at the uneven bargaining power and earnings of those employed in the care industries and how this contributes to earnings inequality in the U.S. overall. The authors document that the earnings of managers and professionals employed in health, education and social services professions are significantly lower than those employed in other professions. They argue that the specific features of care work, including moral commitments, the difficulty of capturing added value and the importance of team work help explain this bargaining power and wages gap.

This is a joint working paper between the Political Economy Research Institute and the Washington Center for Equitable Growth.

Abstract

The uneven bargaining power of both firms and workers may be contributing to increased earnings inequality in the U.S. Econometric analysis of earnings from the 2015 Current Population Survey shows that the earnings of managers and professionals employed in care industries (health, education, and social services), characterized by high levels of public and non-­profit provision, are significantly lower than in other industries. Overall, earnings in care industries are more compressed, with lower ratios of earnings at the 90th percentile to those at the 50th and 10th percentiles. The specific features of care work, including moral commitments, the difficulty of capturing added value, and the importance of teamwork help explain these patterns.

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