Since the 1970s, the gap in wages between skilled and unskilled workers has widened sharply. But new research shows the inequality doesn't stop there.
Discrepancies in job benefits and the quality of work life have also grown, pointing to a bigger chasm than previously recognized.Brooks Pierce, an economist at the Labor Department, used data from the Bureau of Labor Statistics to measure trends in total compensation. While specialists had long assumed that benefits acted as a leveling influence, the opposite is true.
In 1982, people in the top one-tenth of the work force made $24.80 an hour, 3.95 times the $6.28 an hour for workers in the bottom one-tenth. By 1996, the wage gap had widened, with the high-end workers averaging $25.74 an hour, or 4.72 times the $5.46 an hour of those at the bottom. Wages for the purposes of Pierce's study are all expressed in 1997 dollars.
To understand the decline among unskilled workers requires a look at total compensation, which places a value on benefits like health insurance, vacation time and pension plans.
By Pierce's calculation, the total compensation in 1982 of workers in the top 10 percent - $35.16 a hour - was 4.56 times that of workers in the bottom 10 percent - $7.72 an hour. Fourteen years later, the ratio had increased to 5.56 to 1, with highly paid workers having gained $1.73 an hour and low-end workers having lost 93 cents an hour.
Benefits led to a greater discrepancy in earnings between high- and low-wage workers in both 1982 and 1996. Moreover, they were responsible for one-tenth of the increasing disparity between the working elite and the working poor over the 14 years.
The catch, according to Pierce, is that a growing number of workers at the bottom of the pay scale have lost access to key employer-provided benefits.
More than 80 percent of workers received paid holidays and vacations in 1996, but less than 10 percent of those in the bottom tenth received paid leave of any kind.
Similarly, about 70 percent of workers have pension plans, while less than 10 percent of those in the bottom can count on any employer-financed retirement benefits. Access to health insurance follows a similar pattern.