Pay inequity worsens

Working hard and getting ahead used to go hand in hand. But that was a long time ago, before decades of stagnating incomes and rising inequality took their toll. A study published recently by the National Bureau of Economic Research provides an unvarnished look at the damage. The researchers, from the University of Minnesota, the University of Chicago, Princeton University and the Social Security Administration, analyzed the lifetime income histories of millions of workers who started working from 1957 to 1983 and the partial histories of those who entered the workforce after that. The research thus measures not only annual ups and downs or average gains and losses but also longer-term economic mobility.

The findings are a stark reminder that the twin scourges of poor wage growth and income inequality, left unaddressed, will only worsen.

Men have been harder hit than women, partly because they had more to lose. In all, the median lifetime income for men who began working in 1983 was lower than for men who started in 1967, by 10 percent to 19 percent, depending on the inflation measure used. That works out to a total lifetime income loss of $96,100 to $243,350 — even after accounting for the rise in the value of nonwage benefits.

Over the same period, the median lifetime income of women increased by 22 percent to 33 percent, as more women spent more hours and years in the labor force. But the gains, from a very low starting point, were smaller than men’s losses and were not enough to eliminate the historic gap in hourly pay between men and women.

Will lifetime income continue to lag? The answer, unfortunately, appears to be yes. As workers lose ground, inequality deepens because money that would flow to wages tends to flow instead to those at the top of the income ladder. Reasonable people can disagree on how to approach the problem. But no one can deny that a problem exists and that it demands a response.