The wages of care: Bargaining power, earnings and inequality

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Authors:

Nancy Folbre, Professor Emerita of Economics & Director of Research on Gender and Care Work at the Political Economy Research Institute, University of Massachusetts Amherst
Kristin Smith, Family Demographer, University of New Hampshire

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 team work help explain these patterns.

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