Wednesday, May 27, 2015

Go Read:


Go Read over at Bloombergview.com, "What's Really Drive Income Inequality".    The key quote:

"From 1978 to 2012, effectively all of the increase in wage inequality nationally has been due to increasing disparities from company to company. As the researchers note, “the wage gap between the most highly paid employees within these firms (CEOs and high level executives) and the average employee has increased only by a small amount, refuting oft-made claims that such widening gaps account for a large fraction of rising inequality in the population.” The researchers also found, by the way, that the male-female wage gap within companies has shrunk noticeably.

If we want to understand trends in inequality, we have to ask why some companies are outpacing others. "

My takeaway:  It probably doesn't take a lot of analysis to understand that the average pay of a worker at a big software company is going to make more on average then somebody working at your local fast food place.  We probably should call these places factories because that is in essence what they are.  I'm told that your average auto-worker in the 1950-60 period earned the equivalent today of $50 per hour in wages and benefits.  Those days are no more.  Sadly I don't see a trend or industrial equivalent on the horizon that changes this equation.  Anything that comes along is likely to be gobbled up by mechanization and globalization.  

My grandfather worked for nearly 30 years for Studebaker making cars.  His salary along with my grandmother working for Robertson's department store in South Bend and later Notre Dame meant there was enough money to send my father to college, support a middle-class lifestyle and save for retirement.  I'm not sure they'd be able to do that today.