The Gap in Wages Is Growing Again For U.S. Workers - Wall St. Journal [View All]

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Inequality Is Seen as Result Of the Jobless Recovery; Potential Election Theme

By GREG IP
Staff Reporter of THE WALL STREET JOURNAL

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New data from the Labor Department show that after adjustment for inflation, salaries of the country's lowest-paid workers -- those who fall just inside the bottom 10% of the pay range -- fell 0.3% last year, from 2002. Meanwhile, the salaries of the highest paid workers -- those who are just inside the top 10% -- were unchanged. The divergence appeared to grow in the fourth quarter as higher-paid workers gained ground and lower-paid workers slipped further, based on comparisons with original year-earlier data that are subject to revision.

The numbers continue a movement to greater wage inequality that began around the time President Bush succeeded President Clinton and the economy slid into recession three years ago. The trend represents a reversal from the late 1990s, when the lowest unemployment rates in a generation had enabled the lowest-paid workers to keep pace with those at the top.

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The latest data cover full-time salaried workers, representing about 100 million workers, or about two-thirds of the labor force.

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Other scholars emphasize other factors, including a federal minimum wage that hasn't risen since 1997, and the declining power of unions, which traditionally bargained to raise the wages of all workers, regardless of their skill or experience.

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On the campaign trail, Democratic Sen. John Edwards of North Carolina has hammered most on the theme of income disparity. Under President Bush, "there are two Americas, not one," he said last month. "One America does the work, while another America reaps the reward."

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