Wage Stagnation and the Decline of Standardized Pay Rates, 1974–1991

Using new establishment-by-occupation microdata, we show that the use of discretionary wage setting significantly expanded in 1970s and 1980s. Increasingly, wages for blue-collar workers were not standardized by job title or seniority but instead subject to managerial discretion. When establishments abandoned pay rates, fell, particularly lowest-paid a those previously paid above market rates. This shift away from context broader decline worker bargaining power, accelerated real experienced (JEL J31, J33, J52, M52, O33)