Chapter 7 Summary

Labor market and income inequalities have increased in recent years. The factors that influence this are multiple, such as lack of human capital; discrimination in the labor market; and how the types of jobs have changed through the deindustrialization of the economy. Self-employment and affirmative action have been some approaches to dealing with inequalities.

Income and quality of life increased after World War II until the early 1970s, after which incomes stopped increasing with the exception of the highest incomes. Industrial decline began in the United States. By 2014, the top 50 percent of earners were taking in 88 percent of all income, up from about 80 percent in 1980. The top 1 percent alone took in 20 percent of all income. This meant that the top 1 percent of the 1 percent saw vast improvements in their incomes while poverty for others continued to increase. Black and Latino children deal with hunger and poverty the most. Their parents earn less than whites and experience more labor market inequality. Employers hire black and Latinos less and pay them less. Inequalities in the labor market appear in unemployment rates, promotion practices, and employment stability. An earnings gap is a measure of disparities in overall pay, while a wage gap points to differences in hourly earnings. Latino women earn much less than Asian American men. Asian women earn less than Asian men. More white women receive higher paid positions than black women. Black women in low-skilled jobs remain low-wage earners over the course of their employment history compared to white and Latinos. Within group differences such as for Asian Americans persist. Inequalities in the job market are due to discrimination in hiring, promotion, and raises; differences in human capital; and structural influences. Larger systemic changes also play a role in disparities such as changes in the world economy that created less (deindustrialization) manufacturing jobs.