Income Inequality
Income inequality in the United States remained relatively stable for a period of nearly forty years. Beginning in the 1970's, however, this period of stability ended, as the first signs of widening income inequality became apparent. Over the course of the 1970's and 1980's, an increasingly clear trend toward greater income inequality emerged. By the end of the 1980's, the top 20 percent of workers were receiving the largest share of income ever recorded by government figures, and the bottom three fifths were receiving the lowest shares ever recorded. This trend has continued into the 1990's and currently shows no signs of decline. When the indicators of growing inequality were first observed in the 1970's, some researchers argued that the effects were merely temporary artifacts of short-term labor market disturbances. By the end of the 1980's, however, a long-term trend towards increasing inequality had clearly emerged, pointing instead to inflexible changes in the occupationa
The problem according to these theorists, is the type of jobs being generated in the new economy, not worker attributes. For the mismatch theorist, the trend toward greater inequality is temporary and will dissipate once the supply of workers acquires the skills demanded by a post-industrial economy. Polarization theorists, on the other hand, believe that the rise in inequality is permanent, a result of the shift to a service-based economy. This vision of the post-industrial economy is characteristically polarized. Because they believe the causes are structural and permanent, polarization theorists would deny the efficacy of public policies designed to educate and train unskilled workers. The new occupational structure appeared to be one with an increase of well-paid technical, scientific, and professional jobs at the top, a "sliding" middle class, and a growing poorly-paid service and retail jobs at the bottom. But within industry shifts in labor demand away from less-educated workers are perhaps a more important explanation of eroding wages than the shift out of manufacturing. Also, the increasing tendency over the period for men with higher-than-average earnings to marry women with higher-than-average earnings has contributed to widening gap between high-income and low-income households. As occupational reconstructing and growing income inequality became increasingly evident, a heated debated as to the causes and magnitude of these changes arose. The wage distribution has become considerable more unequal with more highly skilled, trained, and educated workers at the top experiencing real wage gains and those at the bottom real wage losses. Mismatch theorists argue that there is an increasing distance between the high skill requirements of post-industrial jobs and the inadequate training and mediocre qualifications of workers. For example, divorces and separations, births out of wedlock, and the increasing age at first marriage have led to a shift away from married-couple households and toward single-parent and non-family households, which typically have lower incomes. Also cited as putting downward pressure on the wages of less-educated workers are intensifying global competition and immigration, the decline of the proportion of workers belonging to unions, the decline in the real value of the minimum wage, the increasing need for computer skills, and the increasing use of temporary workers.
Common topics in this essay:
Inequality Income,
income inequality,
occupational structure,
post-industrial economy,
trend towards,
trend towards increasing,
occupational structure occupational,
unskilled workers,
higher-than-average earnings,
less-educated workers,
polarization theorists,
real wage,
structure occupational,
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