This article analyzes the strategic potential and empirical challenges of private governance in promoting decent work in global agriculture by curtailing buyer power and fostering labor agency, drawing lessons from Fairtrade International-certified flower plantations in Ecuador. The study explains (1) Fairtrade’s logic in promoting ‘trade fairness’ and ‘worker empowerment’ and operationalization of these values via its certification standards, (2) the power relations shaping certification practices in global flower markets and Ecuadorian plantations, and (3) the grounded implications of participation for firms and workers. Important lessons emerge. First, while Fairtrade pursues a promising avenue for challenging the buyer control that erodes supplier and worker power, it has only marginally reduced floral buyer power due to retailer resistance, low-bar certification competition, and programmatic regulatory gaps. Second, although Fairtrade’s empowerment approach has strengthened labor agency within and beyond the workplace, bolstering individual empowerment has proved easier than fostering associational power. As I show, certification practices and outcomes are mediated by commodity-specific global market politics and localized enterprise, labor force, and legal contestations which explain why program aspirations are often not realized. Standard systems can reshape internal trade relations and organizations but cannot alone ensure global trade equity or robust labor representation.
Imperfect Competition, Compensating Differentials, and Rent Sharing in the US Labor Market
We quantify the importance of imperfect competition in the US labor market by estimating the size of labor market rents earned by American firms and workers. We construct a matched employer-employee panel dataset by combining the universe of US business and worker tax records for the period 2001–2015. Using this panel data, we identify and estimate an equilibrium model of the labor market with two-sided heterogeneity where workers view firms as imperfect substitutes because of heterogeneous preferences over nonwage job characteristics. The model allows us to draw inference about imperfect competition, worker sorting, compensating differentials, and rent sharing. (JEL D24, H24, H25, J22, J24, J31, J42)
more »
« less
- Award ID(s):
- 1851808
- PAR ID:
- 10380588
- Date Published:
- Journal Name:
- American Economic Review
- Volume:
- 112
- Issue:
- 1
- ISSN:
- 0002-8282
- Page Range / eLocation ID:
- 169 to 212
- Format(s):
- Medium: X
- Sponsoring Org:
- National Science Foundation
More Like this
-
more » « less
-
We develop, estimate, and test a tractable general equilibrium model of oligopsony with differentiated jobs and concentrated labor markets. We estimate key model parameters by matching new evidence on the relationship between firms’ local labor market share and their employment and wage responses to state corporate tax changes. The model quantitatively replicates quasi-experimental evidence on imperfect productivity-wage pass-through and strategic wage setting of dominant employers. Relative to the efficient allocation, welfare losses from labor market power are 7.6 percent, while output is 20.9 percent lower. Lastly, declining local concentration added 4 percentage points to labor’s share of income between 1977 and 2013. (JEL E25, H71, J24, J31, J42, R23)more » « less
-
Abstract This article analyzes how patent-induced shocks to labor productivity propagate into worker compensation using a new linkage of U.S. patent applications to U.S. business and worker tax records. We infer the causal effects of patent allowances by comparing firms whose patent applications were initially allowed to those whose patent applications were initially rejected. To identify patents that are ex ante valuable, we extrapolate the excess stock return estimates of Kogan et al. (2017) to the full set of accepted and rejected patent applications based on predetermined firm and patent application characteristics. An initial allowance of an ex ante valuable patent generates substantial increases in firm productivity and worker compensation. By contrast, initial allowances of lower ex ante value patents yield no detectable effects on firm outcomes. Patent allowances lead firms to increase employment, but entry wages and workforce composition are insensitive to patent decisions. On average, workers capture roughly 30 cents of every dollar of patent-induced surplus in higher earnings. This share is roughly twice as high among workers present since the year of application. These earnings effects are concentrated among men and workers in the top half of the earnings distribution and are paired with corresponding improvements in worker retention among these groups. We interpret these earnings responses as reflecting the capture of economic rents by senior workers, who are most costly for innovative firms to replace.more » « less
-
This paper describes the adoption of automation technologies by US firms across all economic sectors by leveraging a new module introduced in the 2019 Annual Business Survey, conducted by the US Census Bureau in partnership with the National Center for Science and Engineering Statistics (NCSES). The module collects data from over 300,000 firms on the use of five advanced technologies: AI, robotics, dedicated equipment, specialized software, and cloud computing. The adoption of these technologies remains low (especially for AI and robotics), varies substantially across industries, and concentrates on large and young firms. However, because larger firms are much more likely to adopt them, 12-64% of US workers and 22-72% of manufacturing workers are exposed to these technologies. Firms report a variety of motivations for adoption, including automating tasks previously performed by labor. Consistent with the use of these technologies for automation, adopters have higher labor productivity and lower labor shares. In particular, the use of these technologies is associated with a 11.4% higher labor productivity, which accounts for 20-30% of the difference in labor productivity between large firms and the median firm in an industry. Adopters report that these technologies raised skill requirements and led to greater demand for skilled labor but brought limited or ambiguous effects to their employment levels.more » « less
-
Abstract Immigrant day laborers routinely experience exploitative behaviors as part of their employment. These day laborers perceive the exploitation they experience in the context of their immigration histories and in the context of their long-term goals for better working and living conditions. Using mixed methods, over three data collection periods in 2016, 2019 and 2020, we analyze the work experiences of immigrant day laborers in Houston and Austin, Texas. We report how workers evaluate precarious jobs and respond to labor exploitation in an informal labor market. We also discuss data from a worker rights training intervention conducted through a city-sponsored worker center. We discuss the potential for worker centers to be a convening and remediation space for workers and employers. Worker centers offer a potential space for informal intervention into wage theft and work safety violations by regulating the hiring context where day laborers meet employers.more » « less
- Free Publicly Accessible Full Text
-
Accepted Manuscript1.0
- Journal Article:
- https://doi.org/10.1257/aer.20190790
