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Uneven Tides

Uneven Tides: Rising Inequality in America

Sheldon Danziger
Peter Gottschalk
Copyright Date: 1993
Published by: Russell Sage Foundation
Pages: 300
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  • Book Info
    Uneven Tides
    Book Description:

    Inequality has been on the rise in America for more than two decades. This socially divisive trend began in the economic doldrums of the 1970s and continued through the booming 1980s, when surging economic tides clearly failed to lift all ships. Instead, escalating inequality in both individual earnings and family income widened the gulf between rich and poor and led to the much-publicized decline of the middle class.Uneven Tidesbrings together a distinguished group of economists to confront the crucial questions about this unprecedented rise in inequality. Just how large and pervasive was it? What were its principal causes? And why did it continue in the 1980s, when previous periods of national economic growth have generally reduced inequality?

    Reviewing the best current evidence, the essays inUneven Tidesshow that rising inequality is a complex phenomenon, the result of a web of circumstances inherent in the nation's current industrial, social, and political situation. Once attributed to the rising supply of inexperienced workers-as baby boomers, new immigrants, and women entered the labor market-the growing inequality in individual earnings is revealed inUneven Tidesto be the direct result of the economy's increasing demand for skilled workers. The authors explore many of the possible causes of this trend, including the employment shift from manufacturing to the service sector, the heightened importance of technology in the workplace, the decline of unionization, and the intensified efforts to compete in a global marketplace.Uneven Tidesalso examines the equally dramatic growth in the inequality of family income, and reviews the effects of family size, the age and education of household heads, and the transition to both two-earner and single-parent families. Although these demographic shifts played a role, what emerges most clearly is an understanding of the powerful influence of public policy, as increasingly regressive taxes, declining welfare benefits, and a stagnant minimum wage continue to amplify the effects of market forces on income.

    With the rise in inequality now much in the headlines, it is clear that our nation's ability to reverse these shifting currents requires deeper understanding of their causes and consequences.Uneven Tidesis the first book to get beyond the news stories to a clear analysis of the changing fortunes of America's families. It should be required reading for anyone with a serious interest in the economic underpinnings of the country's social problems.

    eISBN: 978-1-61044-146-9
    Subjects: Sociology, Political Science

Table of Contents

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  1. Front Matter
    (pp. i-viii)
  2. Table of Contents
    (pp. ix-x)

    • 1 Introduction
      (pp. 3-18)
      Sheldon Danziger and Peter Gottschalk

      Conventional wisdom about income inequality in America is radically different in the early 1990s than it was ten to fifteen years ago. At that time, Alan Blinder (1980) began a review article on the distribution of economic well-being by noting that “the more things change, the more they remain the same.” Blinder’s central conclusion was “. . . when we . . . consider thedistributionof economic welfare—economic equality, as it is commonly called—the central stylized fact is one ofconstancy. As measured in the official data, income inequality was just about the same in 1977 ....

    • 2 The Trend in Inequality Among Families, Individuals, and Workers in the United States: A Twenty-five Year Perspective
      (pp. 19-98)
      Lynn A. Karoly

      In 1980, Alan Blinder outlined the conventional wisdom about the distribution of economic well-being in the United States. He said that the stylized fact concerning the distribution of income is one of constancy (Blinder, 1980, p. 416). Despite periods of growing and lessening inequality, he noted, inequality in 1977 remained at about the same level as it had been three decades earlier based on official Census Bureau statistics. Now, in the early 1990s, this conventional wisdom is being challenged. Numerous recent studies indicate that the distribution of income is becoming less equal, and that we are experiencing a shrinking middle...


    • 3 Industrial Change and the Rising Importance of Skill
      (pp. 101-132)
      Kevin M. Murphy and Finis Welch

      The extraordinary changes in wage structures of the 1980s have drawn more attention than any labor market phenomenon in recent memory. The popular press has applauded the increased wage premium for college over high school graduates and the narrowing female/male wage differential while denouncing the lack of progress in wages of blacks relative to whites and the declining wage and employment opportunities of young men who did not go to college. The employment-growth-through-creation-of-bad-jobs controversy was prominent during the 1988 presidential campaign. Economists and other social scientists have expounded hypothetical explanations much more rapidly than data analysts could sort through the...

    • 4 How Much Has De-Unionization Contributed to the Rise in Male Earnings Inequality?
      (pp. 133-164)
      Richard B. Freeman

      In the 1980s, earnings inequality increased greatly among male workers in the United States. The differential between college graduates and the less educated, which had narrowed in the 1970s (Freeman, 1976), shot upwards, particularly among young men (Murphy and Welch, 1992; Katz and Revenga, 1989; Blackburn, Bloom, and Freeman, 1990). Professionals and managers had gains in real earnings while blue-collar men suffered declines. Dispersion of earnings within demographic groups also rose (Juhn, Murphy, and Pierce, 1989). This increase in within-and between-group inequality was not solely the result of change in cyclical conditions. Total earnings inequality grew in the 1983–1988...


    • 5 Family Structure, Family Size, and Family Income: Accounting for Changes in the Economic Well-Being of Children, 1968–1986
      (pp. 167-194)
      Peter Gottschalk and Sheldon Danziger

      The percentage of children living in families with incomes below the official poverty line increased moderately between 1969 and 1979, from 13.8 to 16.0 percent, then rose sharply to 21.8 percent in 1983. During the recent economic recovery these figures declined somewhat, to 19.0 percent in 1989 (U.S. Bureau of the Census, 1989, Table 19). As a result, poverty rates for children in 1989 were at about the same level as in 1965, shortly after the War on Poverty was launched.

      Not only are poverty rates among children higher today than they were in the late 1960s, but the poverty...

    • 6 Working Wives and Family Income Inequality Among Married Couples
      (pp. 195-222)
      Maria Cancian, Sheldon Danziger and Peter Gottschalk

      The participation of women, particularly married women, in the labor force has risen rapidly since 1950. As wives’ earnings have become a more important source of family income, questions have arisen about their impact on family income inequality. In this chapter, we trace the growth of labor-force participation and earnings for married women over the past two decades, and measure the impact of this growth on the distribution of family income of married couples.

      Previous studies have generally found that wives’ earnings reduce inequality among couples. Two factors, however, suggest that this may have changed in recent years. First, the...


    • 7 Growing Inequality in the 1980s: The Role of Federal Taxes and Cash Transfers
      (pp. 225-250)
      Edward M. Gramlich, Richard Kasten and Frank Sammartino

      The United States’ distribution of income in the 1980s can be likened to Hirschman’s (1973) famous tunnel at rush hour. One lane, representing the incomes of highly paid workers and capitalists, is moving ahead rapidly. Another lane, representing the incomes of the majority of families, is barely creeping along.

      What should tax and transfer policy do about such a situation? On one side, the official rhetoric of the Reagan Administration seemed to imply that tax and transfer policy should simply get out of the way. Tax rates should be cut, the fast-moving lane would move ahead even more quickly, and,...

    • 8 The Minimum Wage and Earnings and Income Inequality
      (pp. 251-276)
      Michael W. Horrigan and Ronald B. Mincy

      This chapter examines what would have happened to family income inequality during the 1980s had the minimum wage kept pace with inflation.¹ Two facts suggest that minimum-wage increases could have restrained the increase in family income inequality that occurred during this period. First, earnings at the upper end of the distribution grew much more rapidly than earnings at the lower end (Burtless, 1990). Second, the minimum wage remained unchanged in nominal terms for most of the decade.

      Arguments for and against a higher minimum wage are well known. Proponents of the minimum wage often see it as a means of...

  7. Index
    (pp. 277-287)