Showing posts with the label wage polarization

Service Industry Not the Cause of Wage Polarization

Wage polarization is a growing concern among both academics and government officials. Wage polarization is an occurrence where lower skilled workers and higher skilled workers are vastly different in their earning potential. Research by Author and Dorn (2013) discuss the reasons why such polarization is occurring and which industries are raising lower skilled employment opportunities. The advent of technology is here! Computerization of routine tasks is apparent and those who have not mastered new skills are finding their jobs displaced. The past 25 years have experienced a decline in lower skilled earnings and employment opportunities. The authors indicate that changes are likely to occur across four dimensions: 1.) Greater adoption of information technology; 2.) Reallocation of low-skilled workers from routine tasks to service occupations; 3.) Larger increases in both employment and wages at both the highly skilled and lower skilled labor markets; 4.) Larger inflow