Earnings Effects of Direct Worker Voice in Production

When employers use input from workers, who benefits? Direct worker voice in production could boost productivity and strengthen the bargaining position of production workers. Or it could be a way that employers appropriate workers’ knowledge and expertise, thereby weakening workers’ position. Using a survey of 30,000 US manufacturing establishments matched to administrative records of worker earnings and business performance, the authors find that employers using worker voice pay workers more and have higher productivity. Even conditional on workers’ human capital and establishment characteristics, workplaces using worker voice pay a small earnings premium. One-third of this premium is attributable to increased productivity; the remaining two-thirds of the premium reflects greater worker bargaining power. This analysis provides evidence that worker voice in production supports increased earnings for production workers.