Tuesday, August 16, 2016

Rising Wage Inequality Driven By Growing Differences In Pay Across Industries And Businesses And Not Within Firms

From The Wall Street Journal, Real Time Economics, "When Unequal Pay Makes Everyone Less Productive: A study of hundreds of Indian workers shows pay inequity affects output and attendance" by Adam Creighton:
In advanced countries, income inequality has been increasing. Other research suggests employers are alive to the potentially damaging effects of paying close colleagues too differently. A study of U.S. wage dispersion from 1978 to 2012 indicated rising inequality was being driven by growing differences in pay across industries and businesses, rather than within them.

"Pay differences within employers have remained virtually unchanged, a finding that is robust across industries, geographical regions, and firm-size groups," researchers found.

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