Wages shape job attitudes through relative deprivation, not through direct incentive effects.

Evidence

In periods of high inflation wage freezes effectively reduce workers’ real income as well as their income relative to workers in other sectors. The feelings of deprivation that may result from diminishing workers’ income in these ways are quite different from attitudes toward wages that street-level bureaucrats may have had in other periods. While wages may not play a major role in creating incentives to performance, effectively reducing wages may have a significant impact on street-level bureaucrats’ attitudes toward their jobs. — Michael Lipsky, Street-Level Bureaucracy, 1269

Categorization

• XREF: Connects to relative-deprivation and reference-group theory in social psychology. — connects to: Wage erosion from budget cuts shifts workers’ motivation from service toward remuneration. — Michael Lipsky, Street-Level Bureaucracy: Dilemmas of…, 1271; Employers use wage differentials to reduce worker solidarity — Samuel Bowles and Herbert Gintis, Schooling in Capitalist America:…, 882

Broader Connections

• Wage erosion from budget cuts shifts workers’ motivation from service toward remuneration. #expands (0.85) — Michael Lipsky, Street-Level Bureaucracy, 1271
• Employers use wage differentials to reduce worker solidarity #expands (0.75) — Samuel Bowles and Herbert Gintis, Schooling in Capitalist America, 882