2026-09-20T08:01:08Zhttps://dspace.mit.edu/server/oai/requestoai:dspace.mit.edu:1721.1/1645582026-01-21T04:08:01Zcom_1721.1_7582com_1721.1_7581col_1721.1_131023
Wilmers, Nathan
Roh, Soohyun
Sloan School of Management
2026-01-20T19:45:11Z
2026-01-20T19:45:11Z
2025-09
2025-09-03T19:51:18.950Z
https://hdl.handle.net/1721.1/164558
https://orcid.org/0009-0005-8217-6847
Pay differences between organizations are a key source of wage inequality. I propose a novel account of these differences by starting from the consumers that these businesses serve. Firms that serve high-income consumers specialize jobs into higher-paying and higher-skilled positions focused on quality, while those that serve lower-income consumers emphasize cost minimization by requiring workers to perform a wider range of general tasks. Matching consumer foot traffic data and establishment-level wage records, I find that establishments serving higher-income consumers pay their workers more. This effect holds comparing among establishments in the same neighborhoods and industries. Longitudinally, establishments increase wages when they shift toward higher-income customers. Analysis of online job postings further reveals that jobs at higher-income-serving firms involve a narrower set of tasks that command higher market value. These findings show how consumer markets shape firms’ internal job design and contribute to pay inequality across organizations.
S.M.
Massachusetts Institute of Technology
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https://rightsstatements.org/page/InC-EDU/1.0/
From Wallets to Wages: Consumer Income, Job Design, and Pay Disparities
Thesis
application/pdf
Master
Master of Science in Management Research
Publication
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<Title>From Wallets to Wages: Consumer Income, Job Design, and Pay Disparities</Title>
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<Abstract>Pay differences between organizations are a key source of wage inequality. I propose a novel account of these differences by starting from the consumers that these businesses serve. Firms that serve high-income consumers specialize jobs into higher-paying and higher-skilled positions focused on quality, while those that serve lower-income consumers emphasize cost minimization by requiring workers to perform a wider range of general tasks. Matching consumer foot traffic data and establishment-level wage records, I find that establishments serving higher-income consumers pay their workers more. This effect holds comparing among establishments in the same neighborhoods and industries. Longitudinally, establishments increase wages when they shift toward higher-income customers. Analysis of online job postings further reveals that jobs at higher-income-serving firms involve a narrower set of tasks that command higher market value. These findings show how consumer markets shape firms’ internal job design and contribute to pay inequality across organizations.</Abstract>
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