Academic journal article
By Ryscavage, Paul
Monthly Labor Review , Vol. 117, No. 7
In recent years, U.S. wage earners have faced a variety of changes in the labor market. For example, computers and other information technologies have redefined the nature of many jobs, corporate downsizings and layoffs have altered the career paths of numerous workers, and stiffer global and domestic competition has sharpened concerns over labor costs on the part of employers. These developments and others have produced changes in the shape of the wage distribution and, for many wage earners, their location in it.
It is common knowledge today that the Nation's wage structure became more dispersed and unequal in the 1980's.(1) Not only did the gap between low-wage workers and high-wage workers widen, but the percentage of workers in the middle of the distribution thinned out, resulting in larger percentages of workers at the bottom and top. Research on growing wage inequality, which Frank Levy and Richard J. Murnane recently reviewed, has been voluminous.(2)
The cause of growing wage inequality in the 1980's, however, continues to be the subject of much research, and various explanations have been proposed. A leading candidate has been a shift in the demand for labor in favor of highly skilled and educated workers within industries. Two pairs of researchers--Lawrence F. Katz and Kevin M. Murphy, and John Bound and George Johnson--have associated these shifts with skill-biased technological change, or changes in technology that require well-trained workers.(3) The corollary to such shifts, of course, is the collapsing demand for unskilled workers during the 1980's.(4)
The growing concentration of workers with low wages and the perception that "middle class" jobs were disappearing also prompted much economic research. Not surprisingly, relative shifts in demand along skill and training dimensions were found to be responsible for the increase in low-wage employment. Gary Burtless recently wrote: "The problem they [unskilled workers] face is not an overabundance of bad jobs...but a surplus of unskilled workers in a market requiring more skill than ever."(5) Some research has focused on specific groups. For example, McKinley L. Blackburn, David E. Bloom, and Richard B. Freeman examined the declining economic situation of unskilled white men aged 25 to 64 years and unskilled young men aged 25 to 34 years.(6) Research of this kind, along with growing public concern over the increase in low-wage employment, prompted the Bureau of the Census to publish a report profiling the demographic and social characteristics of workers with low earnings.(7)
It is understandable why so much attention has been focused on the lower end of the wage distribution: the greater incidence of low-wage employment among those persons who maintain families and households has serious economic and social implications. But changes have also taken place in other parts of the income distribution, changes that reflect our ever-evolving society, economy, and labor market. In a rapidly changing world of work, policymakers, the media, and the public should be aware of how the various segments of our wage distribution are being affected.
In the following descriptive analysis, attention is focused on the gender-related shifts that have taken place in the Nation's wage distribution in the 1980's. As has been observed, earnings of women have grown faster, on average, than those of men during the period. But the distributional consequences of these disparate trends have received little attention.
The analysis begins with a brief discussion of some issues pertaining to measuring the wage distribution with the data that are analyzed. Changes in the general shapes of the total wage distribution and the wage distributions for men and women between 1979 and 1989 are then discussed. Subsequent sections are devoted to changes in the proportions of men and women employed in specific segments of the distribution. These changes are further examined by age, education, and industrial sector, and then changes between 1989 and 1992 are presented. …