• July–August 2025
• Article

To remain competitive in the internet-of-things era, should the CEO of SolidTech Innovations, a fictional elevator company, invest a lot of money in reskilling its entire staff? The industry is moving from hardware to software in the form of smart, connected elevators. But instead of laying off legacy hardware staff and hiring new talent, the CEO wants to offer the employees a "Grand Bargain": The company will pay for voluntary reskilling and retraining, but the workers will need to take responsibility for their own futures. Those who opt in will gain valuable skills and have a future with the company; those who don't may face demotions and pay cuts. However, there is pushback from the company's shareholders and leaders. Some want to use the program as a fig leaf for laying off staff; others think it costs too much and might put the company at a competitive disadvantage relative to companies that are hiring technologically skilled people right away. Leaders are worried that longtime workers will balk at learning these new skills and end up quitting, causing the company to lose hundreds of years of cumulative experience. The CEO is now unsure of how to proceed.

• August 2025
• Article

Using financial account data linking small businesses to their owner households, we examine how business owners’ consumption responded to changes in business revenues during the COVID-19 crisis. In the first two months following the National Emergency, business revenues declined by 40 percent, largely driven by national factors rather than local infection rates or policies. However, the pass-through of revenue losses to owner consumption was limited: each dollar of revenue loss resulted in only a 1.6-cent decline in consumption. This muted pass-through persisted through 2021, even after the introduction of COVID-19 vaccines. Our findings suggest that federal subsidies and pandemic-induced reductions in spending opportunities explain the limited impact.

• 2025
• Working Paper

This paper provides causal evidence on how wage inequality among workers affects the labor movement using three complementary research designs: a vignette experiment with union organizers, a natural policy experiment that increased wage inequality among Wisconsin school teachers, and an information intervention during the 2023 Writers Guild of America strike. Across all studies, we find that inequality undermines union strength through multiple channels. First, workers with high individual bargaining power are more likely to withdraw support in unequal environments, preferring individual over collective bargaining. Second, union organizers strategically respond to inequality in ways that may preserve membership but limit redistribution, such as shifting their campaign away from wages and choosing smaller, more homogeneous bargaining units. Taken together, our findings highlight the potential for “inequality traps,” where rising inequality erodes the very institutions designed to counteract it.