A Promising Front In The War On Inequality

Over the last half century, earnings and income inequality have increased within many countries, although the timing and extent of the increase have been variable. This development has engendered a large stream of social science research that has successfully identified some of the main culprits behind the takeoff in inequality. Given that this topic has been worked for so long and with such success, it might be thought that the chances of uncovering an unusually important fact about trends in inequality are rather low. Although that may well be the case, the PNAS paper “Rising between-workplace inequalities in high-income countries” by Tomaskovic-Devey et al. (1) has evidently beaten the odds, breaking ground by showing that the between-workplace share of earnings inequality is rapidly growing in most well-off countries. The inequality regime of contemporary well-off countries melds together 1) superstar workplaces that are chock full of relatively high-earnings workers and 2) low-end workplaces that are chock full of relatively low-earnings workers.\n\nThis result may be understood as the analog to the well-known finding that residential segregation by income is increasing in the United States. As Reardon et al. (2) show, the United States is increasingly segregated into separate residential neighborhoods, some for high earners and others for low earners. It seems that economic segregation of all types is the new normal: We sleep by night in segregated neighborhoods and then work by day in segregated workplaces.\n\nThis latest finding on rising earnings inequality builds upon a preexisting country-specific literature showing that between-workplace or between-firm inequality accounts for a rising share of inequality in the United States (3), West Germany (4), and Sweden (5). The key contribution of Tomaskovic-Devey et al. (1) is to show that this result is a very common one that holds in 12 of 14 well-off countries. Moreover, … \n\n[↵][1]1Email: grusky{at}stanford.edu.\n\n [1]: #xref-corresp-1-1