Most economists have emphasized one of two standard explanations of falling real wages and rising inequality — the ‘wage squeeze” — among U.S. workers today. Some attribute the problems to the changing skill requirements of the economy, creating a “skills mismatch” between labor supply and demand. Others see globalization as the cause of the problem, including both the growing competition from industry in low-wage developing countries, and immigration of relatively low-skilled workers from the same regions. This chapter argues that neither of these views comes close to a complete or adequate explanation of the wage squeeze. Other chapters of the book present the author’s alternative explanation, in which “fat and mean” corporate management strategies are the principal cause of the problem.
