Economic Causes of the Increase in Inequality

Decline in well-paying manufacturing jobs

The disappearance of high-quality manufacturing jobs in many advanced economies that are simply not available in the service sector. As factories close, many middle-skilled workers need to accept low-paying jobs in the service sector, contributing to the “hollowing out” of the income distribution, and a rise in inequality.



Decline in unionisation rates 

4 main reasons in the US

1. Unions often seem irrelevant. In good times, workers don’t need unions to secure increases in wages and benefits because everybody profits from economic prosperity. In bad times, unions can’t protect their members from layoffs, wage and benefit reductions and tougher working conditions. In fact, union contracts often seem to make things worse. The high cost of union labour is often cited as a contributing factor to the demise of many companies. Whole industries have fled the United States, attracted by the lure of cheap foreign labour. Other industries struggle to remain competitive.

2. Unions have a poor public image as being bloated, inefficient and often downright corrupt. Stories about labour racketeering, mob influence and trials of union officials for embezzlement and bribery are common fare on the evening news. Employers are often able to use this aura of greed and corruption to blunt union organising campaigns.

3. Workers are often “out of sync” with union politics. The labor movement is perceived as being a vassal the Democratic Party and a champion of liberal causes. These most recently include immigration reform and national healthcare. Vast amounts of money and manpower have devoted to support labour-approved candidates and issues. Yet many workers, particularly in the South, are deeply conservative and simply do not support these causes. They do not want their union dues going to support issues and politicians with which they disagree.

4. Most Americans now turn to government, not unions, for basic protections. Workers rely on the government for pensions, healthcare, protection against discrimination and a whole variety of other benefits that were formerly provided exclusively by unions.

Unless the labour movement finds a way to reverse its long-standing decline, unions run the danger of their membership shrinking into irrelevance.

source: Selling Low VOC Cleaning ProductsCleanlink



Decline in real value of the minimum wage 


Stacked Deck: How the Dominance of Politics by the Affluent & Business Undermines Economic Mobility in America
Affected by Inflation.

Tax cuts

A government reduces the taxation for equity sake, however, The government can not but regulating compensations such as pensions more strictly to keep their budget constraint. Thus, It has two irony sides. 

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