Managers generally face capital market pressure to report higher earnings, especially when doing so allows them to meet an earnings benchmark. Cost-cutting strategies to increase earnings, such as pressuring employees to work at unsafe speeds or off the clock to increase production, also increase the likelihood of safety violations and wage theft. We examine whether these incidents—which benefit the firm’s managers and shareholders to the detriment of the employees—are evenly distributed across low-wage frontline employees. We predict and find that within low-wage frontline employees, non-white frontline employees are at greater risk, on average, of facing unsafe work environments and wage theft, and this risk increases even further when their employer is under heightened capital market pressure to meet an earnings benchmark. We conclude that capital market pressure appears to have a disproportionate impact on non-white employees, increasing racial inequality in the workplace through safety violations and wage theft.
