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Historical Prevalence and Modern Decline of Piece Rates
Piece rates were a dominant compensation method in the late nineteenth century, with over half of US manufacturing workers being paid based on their output. This practice has become rare in modern economies. By the early twenty-first century, data shows that fewer than 5% of US manufacturing workers, and an even smaller proportion in other sectors, were compensated through piece rates. [1]
[1] Helper, S., Kleiner, M., & Wang, Y. (2010). ‘Analyzing Compensation Methods in Manufacturing: Piece Rates, Time Rates, or Gain-Sharing?’. NBER Working Papers No. 16540.
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Ch.6 The firm and its employees - The Economy 2.0 Microeconomics @ CORE Econ
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