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The squeezed middleThe pressure on ordinary workers in America and Britain$
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Sophia Parker

Print publication date: 2013

Print ISBN-13: 9781447308942

Published to Policy Press Scholarship Online: September 2013

DOI: 10.1332/policypress/9781447308942.001.0001

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Rising incomes and modest inequality: the high-employment route

Rising incomes and modest inequality: the high-employment route

(p.31) 1.2 Rising incomes and modest inequality: the high-employment route
The squeezed middle

Lane Kenworthy

Policy Press

This essay shows that there has only been one brief period since the 1970s in which real wages in the bottom half of the American income distribution have increased - the late 1990s. During this unusual period unemployment was low but this did not trigger a rise in inflation. In fact, a tight labour market led to improvements in job quality for low earners, as employers offered more fringe benefits to attract good workers. Given this evidence, the chapter argues that a high employment rate is an important policy goal when it comes to addressing stagnant wage growth, steeper rates of inequality and stubbornly high poverty levels.

Keywords:   Wages, Income, Labour market, Employment, Jobs, Wage growth, Poverty, Inequality

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