Congratulations to Dr. Boas Bamberger, who was one of nine young academics in Baden-Württemberg to be awarded the prize by the employers' association Südwestmetall in Stuttgart. He received the prize for his outstanding dissertation “Wage Inequality and Customer Satisfaction – An Empirical Study on the Effects of Wage Inequality on Customer Relations and Business Success” – a topic that is currently a top priority in management.
Wage inequality weakens long-term economic growth and social cohesion. Public discourse led to the obligation to disclose salaries of top managers. However, wage inequality between top managers and their employees has continued to rise: in the last 10 years alone by 22% in Germany, 17% in England and 18% in the USA. In Germany, an employee has to work 36 years to earn the annual salary of a top manager; in England 55 years and the USA even 134 years (based on the study sample).
In the course of his research, Mr. Bamberger therefore showed, among other things, that companies increase their profitability in the short term through wage inequality. However, this positive effect of wage inequality on short-term profitability disappears in the long run. Companies should therefore be aware of the unfavourable side effects of wage inequality: Wage inequality reduces customer satisfaction through increased customer-related opportunism and weakened customer-oriented culture. In addition, he shows within his research how companies can avoid these effects.
For more than 30 years, Südwestmetall has been honouring outstanding achievements of young academics with the sponsorship award. The prizes are awarded annually on the recommendation of the universities for scientific work that is of significance for the industrial working world or its socio-political framework conditions.