Inter-Industry Wage Differences and Theories of Wage Determination

Numerous studies have shown large differences in wages for apparently similar workers across industries. These findings pose a challenge to standard model s of labor market behavior. A problem with past studies of industry wage differences is that they have failed to distinguish between union and nonunion workers. Many economists may expect union workers wages to be set in a noncompetitive fashion but would be surprised if nonunion wages were. We examine the differences in wages across industries for both union and nonunion workers. We find that even after controlling for a wide range of personal characteristics and geographic location large wage differences persist for both union and nonunion workers. Furthermore the premiums of union and nonunion workers are highly correlated. We review past studies which demonstrate that industry wage premiums are also highly correlated across countries and have been very similar over many decades. We present new evidence that the wages of different occupations are highly correlated across industries -- that is if any occupation in an industry is highly paid all occupations are. We also review the evidence which suggests that people who move from low to high paying industries receive a large fraction of the industry wage premium and that those who move from high to low paying industries lose the premium. Finally, we review the evidence on the correlates of industry wage differences. Quit rates, human capital variables, capital labor ratios and market power measures are all positively correlated with industry wage differences individually though the data are not adequate to determine their independent contributions in multiple regression. On the basis of all the evidence we conclude that standard labor market clearing models can not easily explain all the facts. Several alternative models are discussed including efficiency wage and collective action threat mode1 s. These are found to be more consistent with the facts though some troubling problems remain.

Are Efficiency Wages Efficient?

Efficiency wage models have been criticized because worker malfeasance can be prevented in a pareto efficient manner by requiring workers to post a bond which they lose if they are caught cheating. However, since it is costly to monitor workers and costless to demand a larger bond, firms should pay nothing for monitoring and demand very large bonds. Since we observe that firms devote considerable resources to monitoring workers, bonds must be limited. Therefore firms must use second best alternatives -- intensive monitoring and/or efficiency wages. The payment of efficiency wages cannot be ruled out on a priori theoretical grounds.

Bankruptcy Reform: An Orderly Development of Public Policy

In legislating the pending bankruptcy reform, Congress has made many of the key decisions behind closed doors. In fact, the process has been characterized as a congressional effort to pass a stealth bankruptcy bill. This secrecy brings into question the democratic nature of congressional deliberation. When the Framers designed the legislative branch, open debate was envisioned as the rule, not the exception. Unfortunately, Congress has adopted a secretive, approach to pushing through recent bankruptcy legislation. In a sharp departure from the decades-long congressional approach to bankruptcy legislation, Congress stopped seeking expert advice and instead turned to special interest lobbyists…” Thus, Congress utilized the cover of secrecy to boldly tailor the bankruptcy laws to serve special interests. Consequently, theuse of the term \u27bankruptcy reform\u27 is considered an oxymoron to most organizations of bankruptcy professionals .... Virtually every group of bankruptcy professionals, regardless of the constituency represented, opposed both the substance of the legislation and the process ... taken by Congress. Recent efforts to alter the bankruptcy system under the cover of secrecy have received harsh criticism. Proponents of bankruptcy reform are so intent upon enacting legislation favoring special interests that they have taken the unprecedented step of attempting to enact the legislation under the guise of a completely unrelated, already-enacted bill. These tactics of congressional secrecy are contrary to the process of open, reasoned, and deliberate decision making that is a cornerstone of American democracy. This secrecy is wholly inconsistent with the process of public deliberation which the Founders envisioned

Hearing restoration after resection of an intracanalicular vestibular schwannoma: a role for emergency surgery?

Journal ArticlePatients with vestibular schwannomas (VSs) most commonly present with sensorineural hearing loss, which is often insidious or gradual. Up to 26% of patients may present with sudden hearing loss, however, which poses an important surgical challenge. Sudden hearing loss has been attributed to spasm or occlusion of the labyrinthine artery resulting from tumor compression, and it is usually treated with corticosteroids. Hearing preservation surgery is not usually attempted in patients who have poor or nonserviceable hearing preoperatively. The authors describe a 68-year-old man with complete deafness of the left ear since childhood, who developed sudden, profound sensorineural hearing loss in the right ear. Magnetic resonance imaging revealed a small right-sided intracanalicular tumor. Treatment with high-dose corticosteroids produced only minimal improvement in hearing. Subsequent emergency decompression and resection of a VS resulted in rapid improvement and restoration of hearing, with facial nerve preservation. Although most neurotologic lesions in patients with hearing in only one ear are managed nonsurgically, resection of small tumors in the setting of sudden hearing loss should be considered in selected cases. This finding indicates that a therapeutic window may exist during which sudden hearing loss caused by intracanalicular tumors is reversible

Bankruptcy Reform: An Orderly Development of Public Policy

In legislating the pending bankruptcy reform, Congress has made many of the key decisions behind closed doors. In fact, the process has been characterized as a congressional effort to pass a stealth bankruptcy bill. This secrecy brings into question the democratic nature of congressional deliberation. When the Framers designed the legislative branch, open debate was envisioned as the rule, not the exception. Unfortunately, Congress has adopted a secretive, approach to pushing through recent bankruptcy legislation. In a sharp departure from the decades-long congressional approach to bankruptcy legislation, Congress stopped seeking expert advice and instead turned to special interest lobbyists…” Thus, Congress utilized the cover of secrecy to boldly tailor the bankruptcy laws to serve special interests. Consequently, theuse of the term \u27bankruptcy reform\u27 is considered an oxymoron to most organizations of bankruptcy professionals .... Virtually every group of bankruptcy professionals, regardless of the constituency represented, opposed both the substance of the legislation and the process ... taken by Congress. Recent efforts to alter the bankruptcy system under the cover of secrecy have received harsh criticism. Proponents of bankruptcy reform are so intent upon enacting legislation favoring special interests that they have taken the unprecedented step of attempting to enact the legislation under the guise of a completely unrelated, already-enacted bill. These tactics of congressional secrecy are contrary to the process of open, reasoned, and deliberate decision making that is a cornerstone of American democracy. This secrecy is wholly inconsistent with the process of public deliberation which the Founders envisioned

Employee Crime and the Monitoring Puzzle

The simplest economic theories of crime predict that profit-maximizing firms should follow strategies of minimal monitoring with large penalties for employee crime. We investigate possible reasons why firms actually spend considerable resources trying to detect employee malfeasance. We find that the most plausible explanations for firms' large outlays on monitoring of employees-legal restrictions on penalty clauses in contracts and the adverse impact of harsh punishment schemes on worker morale-are also consistent with the payment of premium (rent-generating) wages by cost-minimizing firms.Economic

Estimation of Earthquake Loss due to Bridge Damage in the St. Louis Metropolitan Area: Part I - Direct Losses

The risk associated with earthquake hazards on highway systems is dependent on the complexity of a network and its redundancy in providing traffic flow. Earthquake loss estimation studies can provide decision makers with an appreciation of the importance of having a highway network resistant to earthquakes and information to make the network resistant to these events. The direct economic loss was estimated for a major metropolitan area, St. Louis, for a series of earthquake scenarios. The primary component of the study was damage to bridges within the highway system. The study zone covers the St. Louis metropolitan area and its surrounding suburban regions. The study region includes several major alluvial river valleys with liquefaction susceptible areas. Earthquake scenarios with epicenters in St. Louis (MW 7.0), Germantown, Ill. (MW 7.0) and New Madrid, Mo. (MW 7.7) were selected to contrast high impact/low probability and low impact/higher probability events. The losses to the bridge infrastructure were estimated to range from $70 to$800 million depending on the earthquake event. The data collection, generation, and interpretation are described along with the procedures required to carry out the loss estimation using the geographic information system-based HAZUS-MH system. The output of this project was used as input for a hybrid indirect loss calculation presented in the companion paper

Earthquake Hazard Input for Loss Estimation Study: St. Louis Highway System

The long recurrence period and high consequence earthquakes events in the New Madrid Seismic Zone have caused some federal agencies (e.g., NEHRP, FHWA) to look at the more densely populated areas where higher seismic risk is present. This paper presents the data collection, interpretation, and analysis of the geotechnical information required for an earthquake loss estimation study in St. Louis metro area. The loss estimation study was limited to the highway transportation system, where only the major highways were considered. The project information was processed using a GIS, and the subsequent loss analysis was executed using the HAZUS-MH program