Abstract
Recent wage growth at the bottom of the earnings distribution in the U.S. has
reversed a decades-long trend of widening wage inequality. Numerous state and
local minimum wage increases have overtaken an increasingly non-binding federal
minimum wage, and robust labor demand in the post-pandemic recovery drove
substantial wage growth in the low-wage sector. An increasingly pervasive phenomenon
during this time period is the use of voluntary, company-wide minimum
wages by private employers, including some of the largest retailers in the U.S. We
study the effects of these large retailer policies on their own wages and employment
as well as spillover effects on other employers. Voluntary minimum wages
result in sizable wage increases and reductions in turnover at the companies that
implemented them. Despite the decline in separations from companies with voluntary
minimums, overall hiring rates at other companies do not decline, and wages
at other companies do not increase. Thus, while voluntary minimum wages have
affected over 3 million jobs among the largest retailers with policies, their impact
on the broader market is limited.