Wage gap between highest- and lowest-paid widens

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The gap between America’s highest- and lowest-paid workers is widening, The Wall Street Journal reported.

Labor Department figures released Tuesday show that between the end of the recession in mid-2009 and the first quarter of 2012, earnings of Americans at the top – meaning those who earned more than 90 percent of all workers – rose 7 percent, before adjusting for inflation.

During the same period, wages of those at the bottom, those who earned less than 90 percent of all workers, rose 2.5 percent.

That pay difference predates the global financial crisis. Between 2003 and 2007, wages increased 12.9 percent for high earners, compared with 8.4 percent for the lowest-paid 10 percent of workers.

Wages at the top have been growing more rapidly than those at the bottom for decades. Among the explanations offered by academic economists are globalization and the rise of technology. Globalization has shifted many of America’s low-skilled, high-paid manufacturing jobs overseas, while technology has made U.S. firms more productive but rendered some jobs obsolete. The result: America’s labor market increasingly looks divided between jobs that require higher education and those that don’t.

“One of the most important factors is the rising value of a college or post-college degree,” said David Autor, an economics professor at the Massachusetts Institute of Technology. “People who have four-year degrees, and even more so, those with graduate degrees, have done well in the last 30 years.”

In the first quarter of 2012, people in the bottom tenth of the work force earned $360 or less a week, the Labor Department said. The typical worker among the top 10 percent of earners was paid $1,858 or more a week. Between 1979 and 1989, wages for top earners rose 75 percent, while those for the bottom tenth of the work force climbed 54 percent.