A widening income gap

Date posted: June 6, 2011

A new report indicates that the income gap between the highest paid and the lowest paid workers has again increased.  N.C. State University economist explains why and what it means.

“Actually … this was an international report and looked not only at the U.S., where we do have a widening income gap,  but it looked at other developed countries in the world and what it found was this is happening all over the world. The gap between — the pay gap between — those of the highest-paid level and the lowest-paid level has been widening.

“And so there’s it’s something beyond just the U.S.  It’s something that’s happening worldwide, and I think the answer is modern technology. What has happened, I think as most people would know, in the workplace over the last 30 some years is that we’ve seen technology really come in to the workplace.  Computers, computer programming, modern machinery, and it takes a knowledgeable worker to put that technology to its best use.

“So that has increased the relative benefit of people getting a degree beyond high school, so that’s why more and more people are going to community colleges and four-year programs and really beyond. And further what that means is folks with education are getting paid better. Folks who for some reason don’t get education are actually falling behind. And that is one of the main factors behind the widening income gap.

“Another factor has to do with work hours.  It actually turns out … that people who make more money actually work more hours. So higher paid workers are actually working more hours.

“And then here’s another interesting trend. We’re seeing marriages between highly educated people increase. So, where as in the past you might have had a college-educated person marry a high school-educated person, now it’s more likely that two college-educated people will marry.  Two high school-educated people will marry.  That also widens the pay gap.”

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