Institutional Failure and the American Worker: The Collapse of Low-Skilled Wages
Author(s)
Howell, David R.
Abstract
One of the most troubling aspects of the surge of inequality since the mid-1970s is the sharp decline in real earnings for less-skilled workers, particularly for men with a high school education or less. Most economists and policy makers attribute the problem to a decline in the demand for low-skilled workers, which is seen as a result of technological change and/or international trade. This essay challenges the conventional interpretation. Based on a careful analysis of the timing of labor market changes and the particular groups that were affected, the author argues that changes in management practices and government policies provide a better explanation of the collapse of low-skilled wages.
