The US Has the Highest Share of Employees in Low Wage Work

I wasn’t aware of this (click on the figure for a larger graph):

Low+wage+2[1]

[I used this as part of a talk on Monday night at the Wayne Morse Center here at the UO (I’m on the Board of Directors for the Center). Dean Baker spoke first, and he talked about what caused the recession. I followed with what is likely to come next and how policymakers might help the economy in the short-run and long-run.

In his talk, Dean Baker argued it was the housing bubble that caused the recession, not the collapse of the financial sector — he argues that if the financial crash had not occurred, we still would have had a severe recession. I agree that the housing bubble was the primary cause, but I also think the financial sector played a role in making things worse, e.g. through the unwinding of high, under-regulated leverage ratios. I talked about both short-run and long-run problems and what we might do about them. The graph above was part of a discussion of how we might improve things for labor (the graph is from Tim Taylor, he has another graph I included in the talk showing increased wage polarization. The percentage of workers earning less than 2/3 of the median wage has increased from 22% in 1979 to 28% in 2009.]

This post originally appeared at Economist’s View and is posted with permission.

4 Responses to "The US Has the Highest Share of Employees in Low Wage Work"

  1. Nathaniel   April 12, 2012 at 8:17 am

    I think this graph is very interesting. However, I notice that the data is rather old from some countries. I wonder how this would look if all of the data was from 2011. (Especially Italy, Portugal and Spain).

  2. Lynn   April 12, 2012 at 2:26 pm

    Keep in mind that the unemployed are not included in the chart. Since most companies cut workers from the bottom (lower income levels), a larger lower-income workforce may mean that more lower-income workers have been retained.

  3. josap   April 13, 2012 at 11:31 pm

    companies cut workers from the bottom (lower income levels), a larger lower-income workforce may mean that more lower-income workers have been retained.

    If more at the bottom are cut, how can there be more retained at the same time?
    Would it not be that any new hires were offered a lower wage than the people they replaced?