Category Archives: Compensation

State of the Union: Millennial Dilemma

Source: Stanford Center on Poverty and Inequality, May 2019

The annual Poverty and Inequality Report provides a unified analysis that brings together evidence across such issues as poverty, employment, income inequality, health inequality, economic mobility, and educational access to allow for a comprehensive assessment of where the country stands. In this year’s issue, the country’s leading experts provide the latest evidence on how millennials are faring.

Contents include:

Executive Summary
David B. Grusky, Marybeth Mattingly, Charles Varner, and Stephanie Garlow
With each new generation, there’s inevitably much angst and hand-wringing, but never have we worried as much as we worry about millennials. We review the evidence on whether all that worrying is warranted.

Racial and Gender Identities
Sasha Shen Johfre and Aliya Saperstein
The usual stereotypes have it that millennials are embracing a more diverse and unconventional set of racial and gender identities. Are those stereotypes on the mark?

Student Debt
Susan Dynarski
Often tagged the “student debt generation,” millennials took out more student loans, took out larger student loans, and defaulted more frequently. Here’s a step-by-step accounting of how we let this happen.

Employment
Harry J. Holzer
Labor force activity has declined especially rapidly among young workers. The good news: We know how to take on this problem.

Criminal Justice
Bruce Western and Jessica Simes
The imprisonment rate has fallen especially rapidly among black men. Does this much-vaunted trend conceal as much as it reveals?

Education
Florencia Torche and Amy L. Johnson
The payoff to a college degree is as high for millennials as it’s ever been. But it’s partly because millennials who don’t go to college are getting hammered in the labor market.

Income and Earnings
Christine Percheski
When millennials entered the labor market during the Great Recession and its aftermath, there were uniformly gloomy predictions about their fate. Does the evidence bear out such gloomy predictions?

Social Mobility
Michael Hout
Millennials have a mobility problem. And it’s partly because the economy is no longer delivering a steady increase in high-status jobs.

Occupational Segregation
Kim A. Weeden
Are millennial women and men working side by side in the new economy? Or are their occupations just as gender-segregated as ever?

Poverty and the Safety Net
Marybeth Mattingly, Christopher Wimer, Sophie Collyer and Luke Aylward
Millennial poverty rates at age 30 are no higher than those of Gen Xers at the same age. But this stability hides a problem: Millennials are replacing a falloff in earnings with large increases in government assistance programs.

Housing
Darrick Hamilton and Christopher Famighetti
Housing reforms during the civil rights era helped to narrow the white-black homeownership gap. But those gains have now been completely lost … and the racial gap in young-adult homeownership is larger for millennials than for any generation in the past century.

Social Networks
Mario L. Small and Maleah Fekete
Millennials are not replacing face-to-face networks with online ones. Rather, they’re a generation that’s found a way to do it all, forging new online ties while also maintaining the usual face-to-face ones.

Health
Mark Duggan and Jackie Li
It might be thought that, for all their labor market woes, at least millennials now have health care and better health. How does this story fall short?

Policy
Sheldon Danziger
A comprehensive policy agenda that could help millennials … and other generations too.

Museum Workers Share Their Salaries and Urge Industry-Wide Reform

Source: Zachary Small, Hyperallergic, June 3, 2019

Over 660 arts professionals have added to a spreadsheet detailing their salaries. The pay for these prestigious positions may be lower than you expect. ….

…. Because the spreadsheet entries are published anonymously, Hyperallergic could not independently verify the accuracy of all the listed salary information; however, the information does match long-running perceptions about pay in the field. (New entries are being added through this Google Form.) Although positions like curatorial assistant are competitive and prestigious entry points into museum work, the pay is relatively low with starting salaries running between $30,000 and $50,000. By comparison, the select few who rise through the ranks to become chief curators at major museums can expect to make well within six figures. ….

Annual Report on the Economic Status of the Profession, 2018–19

Source: American Association of University Professors, May 2019

From the summary:
For our annual Faculty Compensation Survey, the AAUP collected data from more than 950 colleges and universities across the US, including community colleges, small liberal arts colleges, and major research universities. The 2018-19 data cover more than 380,000 full-time faculty members, and also include salaries for senior administrators and pay for part-time faculty members.

On average, salaries for full-time faculty members at US colleges and universities are 2 percent higher in 2018-19 than they were in the preceding academic year. But with prices in the economy as a whole growing by 1.9 percent during the year, faculty salaries barely budged when adjusted for inflation. This is the third successive year that increases in average full-time faculty salaries have barely outpaced inflation….

State Collective Bargaining Laws and Public-Sector Pay

Source: Eric J. Brunner, Andrew Ju, ILR Review, Vol. 72 no. 2, March 2019
(subscription required)

From the abstract:
Using the Public Use Microdata Sample from the 2005 to 2015 American Community Survey, the authors provide new evidence on how state collective bargaining laws affect public-sector wages. To isolate the causal effect of bargaining laws on public-sector pay, they examine wage differentials between otherwise similar public- and private-sector employees located in the same local labor market. They estimate difference-in-differences (DD) models that exploit two sources of plausibly exogenous variation: 1) policy discontinuities along state borders and 2) variation within states in collective bargaining laws in states where the majority of public workers are without collective bargaining rights. Findings show that mandatory collective bargaining laws increase public-sector wages by approximately 5 to 8 percentage points. Results therefore suggest that mandatory collective bargaining laws provide a formal mechanism through which public-sector workers are able to bargain for increased compensation.

What do government unions do? Public sector unions and nonunion wages, 1977–2015

Source: Jake Rosenfeld, Patrick Denice, Social Science Research, Volume 78, February 2019
(subscription required)

From the abstract:
In this article we investigate the connection between public sector union memberships and nonunion worker pay. We leverage nearly four decades of Current Population Survey (CPS) data on millions of U.S. workers to test whether public sector union density, measured at the state-level, is associated with higher average wages among unorganized workers. We find stable and substantively large positive effects of state-level public sector union strength on nonunion public sector workers’ wages. These results are robust to the inclusion of a range of state-level controls, including GDP, average educational attainment, public sector size, and the strength of private sector unions. Analyses of public sector unions and nonunion private sector pay reveal a robust positive relationship – but one limited to women, revealing how occupational segregation interacts with pay-setting institutions to influence wage outcomes.

Compensation Consultants and the Level, Composition and Complexity of CEO Pay

Source: Kevin J. Murphy, Tatiana Sandino, Harvard Business School Accounting & Management Unit Working Paper No. 18-027, Last revised: March 8, 2019

From the abstract:
We provide fresh evidence regarding the relation between compensation consultants and CEO pay. First, firms that employ consultants have higher-paid CEOs—this result is robust to firm fixed-effects and matching on economic and governance variables. Second, while this relation is partly due to consultant conflicts of interest, it is largely explained by the impact consultants have on the composition and complexity of CEO pay plans; notably, this impact fully mediates the consultant-CEO pay relation. Third, firms with higher-paid CEOs and more complex pay plans are more likely to hire a consultant. Lastly, say-on-pay voting patterns suggest shareholders view positively the advice consultants provide but only when consultants do not provide other services. We also find suggestive evidence of boards “layering” new equity incentive plans over existing ones, thereby increasing the impact of composition and complexity on CEO pay beyond the premium the CEO would demand for bearing additional compensation risk.

The Child Care Crisis Is Keeping Women Out of the Workforce

Source: Leila Schochet, Center for American Progress, March 28, 2019

More mothers would increase their earnings and seek new job opportunities if they had greater access to reliable and affordable child care. ….

….This report highlights the relationship between child care and maternal employment and underscores how improving child care access has the potential to boost employment and earnings for working mothers. Based on new analysis of the 2016 Early Childhood Program Participation Survey (ECPP), it demonstrates how families are having difficulty finding child care under the current system and how lack of access to child care may be keeping mothers out of the workforce. The report then presents results from a national poll conducted by the Center for American Progress and GBA Strategies, which asked parents what career decisions they would make if child care were more readily available and affordable. Finally, the report outlines federal policy solutions that are crucial to supporting mothers in the workforce. ….

Closing the Gender Pay Gap: New Approaches to an Old Problem

Source: Kurt Stanberry, Compensation & Benefits Review, First Published March 14, 2019

from the abstract:
This article addresses new approaches to address a long-standing employment compensation problem—the gender pay gap. Existing approaches, including the Equal Pay Act and Title VII, are more than 50 years old, and have only been marginally successful in resolving this problem. A pay gap based on gender remains a problem today. New approaches include the potential passage of the Paycheck Fairness Act at the federal level and a variety of laws at the state level. Some states have passed pay equity laws that are more successful than the federal law due to the use of the comparable work concept. Additionally, some states have passed laws regulating the asking of salary history questions, as well as the use of non-compete and no-poaching agreements, all of which have a chilling effect on pay equity. The result of the combination of these actions is a probable reduction of the gender pay gap, although eliminating it remains a distant goal.