In the past couple of decades the issue of wage inequality has become a topic of discussion in government circles, within corporations and small businesses and in media offices around the globe. Some of the research into this subject focuses on the changes in computer technology that have made certain skills highly desirable, while leaving “unskilled” workers behind in the wage race. Research also shows the increasing gap between wages paid to college-educated workers and those without that education.
But a study published in 2005 indicates that, curiously, there is a discrepancy between certain groups of workers even when the individuals in those groups have the same level of education. Explaining this gap goes a long way toward understanding wage inequality and how it is measured.
Apparently there are significant differences in what is paid to workers with certain skills in, for example, the auto industry, and auto-industry workers that don’t have those same skills. This seems to be the case even if both groups of workers are predominately college educated.
Other studies have shown that wage inequality overall increased noticeably in the 1980s and again in the mid-to-late 1990s. These studies have used straightforward but aggressive surveys to gather information from workers about their earnings and buying ability. The most fundamental way of measuring wage inequality involves putting together solid numbers on what workers earn per hour, per week, per month and per year, then combining this with details about how much they actually worked to earn this income.
A key to understanding the resulting data is that during the period information was gathered the survey method change from a pencil-and-paper system to a computer-answer system. Researchers ask if this significant change in the method of gathering data affected the results of a wage-inequality study.
Some changes in wage status, and the resulting gaps between groups of workers, can be attributed to real changes in the economy. This is especially true over a long period of time. Products and services that were in high demand two decades ago provided work at a high wage level. But if these products and services lose their luster within the economy, the same workers might report a reduction in wages 10 or 20 years later, even though their education and skills level did not change. These people may simply be employed in a business that pays less, sometimes without regard to education and special skills.
From an overall viewpoint, research indicates that wage inequality has increased consistently over a 30-year period, with some short-term increases in the 1980s and the 1990s (as mentioned earlier). It is interesting to note that studies also show the gender wage gap to be very real, with men consistently making about one-third more than women from 1984 through 2004 (the most recent year studied). This study was made using information from college-educated women as well as college-educated men. The average for the 20-year period studied shows that women earned hundreds of thousands of dollars less than a man.