. As explained in Abdela and Steinbaum , much of this research estimates the expected change in average wages for a given change in employer concentration in a particular industry- or occupation-specific labor market.
To estimate the percent change in concentration due to the merger, we first estimate the level difference in the metropolitan area grocery store industry concentration before and after the merger and then divide that level change by an estimate of the baseline, pre-merger concentration.To estimate the pre-merger concentration levels, we choose an average pre-merger concentration level by relying on the existing research literature that calculates trends in retail or grocery concentration.
Wages will fall on average for all grocery store workers in these areas due to the decrease in employer competition. The exact magnitude of the wage response is based on estimates published in Rinz : Specifically, our analysis assumes that a 10% increase in concentration in a labor market will lower the average wage by 0.4%.summarizes the results. The metropolitan areas with concentration increases contain 746,000 grocery store workers, and the total annual wage bill is $26.3 billion.