Wages

Introduction

Wages – too low and too unequal – are at the heart of key public policy debates and social movements from the Fight for Fifteen to rising wage inequality. The Shift Project collects detailed information to define what we know about this crucial aspect of job quality. The Shift data break new ground in linking employers and employees and so providing detailed data on what workers earn, firm-by-firm.

The Company Wage Tracker

Our data allow for key comparisons across 125 of the largest service-sector employers in the United States. We provide a company-by-company breakdown that shows just what workers earn at some of the country’s largest and most profitable firms.

Made with Visme

In collaboration with the Economic Policy Institute, we released the Company Wage Tracker in April 2022. The tracker is an interactive data tool that reveals how wages are distributed for hourly workers at 66 large service-sector firms. This tool lays bare just how low wages are throughout the service sector, but also the degree to which firms vary both between and within sectors in what they pay. Low wages are most prevalent in the food service and hospitality sectors, where 63% of workers earn below $15/hr. But, even within this sector, there is variation. In-N-Out Burger is a bright spot, with only 9% workers earning below $15/hr, as compared with 89% of workers earning under $15/hr at McDonalds. These distribution patterns illustrate the low wages are not inevitable.

Wage Patterns for Key Populations

The Shift Project’s wage data also reveals how workers wages fare across key sub-populations of workers in the service-sector.

Young Workers: A series of Shift Project briefs demonstrates the variability of hourly wages across young service-sector workers.

One brief (2021) reveals that a substantial amount of these young service-sector workers earn below a living wage (defined as $15/hr for a one-person household in high cost states), with those at the 10^th percentile of this wage distribution making around $8.25/hr and those at the 90^th percentile earning nearly $14.65/hr. This leaves young service-sector workers vulnerable to economic insecurity.

Another brief (2023) unveils how, during the “Great Resignation,” many young workers left their service-sector jobs to upgrade job-quality aspects, like wages. For example, young workers who switch to a new job during this time period increased their wages by more than $2.50/hr while those who remained at their job only did so by around $1.70/hr.

CA Fast Food Workers: A Shift Project brief (2022) illustrated the importance of California’s Fast Food Accountability and Standards Recovery Act by showing that fast food workers faced the lowest wages and least unpredictable schedules among service workers in California.

*Source: “Low Pay, Less Predictability: Fast Food Jobs in California”*. 2022. The Shift Project.

Gig Workers: In addition to W2 workers in the service sector, the Shift Project has also provided new data on working conditions for gig workers. A collaboration with the Economic Policy Institute, “National survey of gig workers paints a picture of poor working conditions, low pay”, revealed that the independent contractor label masked significant levels of sub-minimum wages for gig workers – with 14% reporting effective hourly wages of less than the federal minimum.

*Source: “National survey of gig workers paints a picture of poor working conditions, low pay.”* 2022. The Shift Project and Economic Policy Institute.

Wage Inequality

It’s no secret that the service sector is home to some of the most precarious jobs. The over-representation of members of marginalized populations, including women, mothers, and trans/non-binary people in this sector is an important source of broader wage inequality for these groups.

The Shift Project data also shows that workers in these groups earn lower wages within the service sector, compared to their co-workers.

Gender Wage Gaps:

Recent Shift estimations find the (unadjusted) gender wage gap to be nearly $2/hr.

The figure above shows that the average wage at a firm declines as the share of female workers increases.

Motherhood Wage Gaps:

While mothers in the service sector face a $X/hr penalty, fathers earn a wage premium of $X/hr.

Trans/Non-binary Wage Gaps:

Trans and non-binary service-sector workers face worse working conditions than their cis-gender co-workers, including on wages.

Transgender women earn nearly $1.25/hr less than their cisgender male counterparts.

One crucial but often overlooked source of these wage gaps is between-firm segregation, or the unequal sorting of women, mothers, and trans/non-binary folks into lower paying firms.

This sorting isn’t just because mothers, for instance, look for jobs that might pay less in exchange for more flexible schedules or better benefits. It’s also not just that these low-paying firms are also less profitable. Instead, this kind of between-firm segregation appears to be the result of discrimination at the time of hiring.

However, between-firm sorting doesn’t explain all of wage gaps, even among similar workers at the very same firms, marginalized workers often still earn less than their co-workers.