For almost three decades America has been experiencing a surge in wage polarization. There is now a consensus among economists that since the late 1970s, the lowest wage and highest wage Americans have been growing in number, while the proportion of those earning middle level wages has been falling. Early assessments of this trend by conventional economists incorrectly attributed wage polarization was to a rise in the market value of college education during the 1980s. The wage gap occurred from a decline in wages among the non-college educated work force, not from a growth in the college wage. The puzzle then remains: What is causing the long-term toward increased earnings inequality? This paper argues that businesses’ pursuit of “flexibility” to adapt to heightened global competition is creating a new dualism that is proliferating low wage, insecure employment. This dark side of flexible production is responsible for much of the wage polarization in the United States.
