Factors underlying the widening U.S. income gap were debated March 25 at the seventh in the series of New Paradigm Symposia at the Carnegie Endowment Center for International Peace in Washington, D.C.
Betty Friedan, distinguished visiting professor at Cornell's School of Industrial and Labor Relations, and Lois Gray, ILR professor of management and labor relations, co-moderated the symposium, sponsored by the Ford Foundation and Cornell's Institute for Women and Work.
With a standing-room-only crowd of 200 in attendance, the panelists were: Bonnie Laden, director of the Healthcare Division at the Service Employees International Union, who oversees collective bargaining agreements for the union nationally; Marvin Kosters, resident scholar and director of Economic Policy Studies at the American Enterprise Institute, who has served as senior economic adviser to the White House; and Jerod Bernstein, former deputy chief economist at the U.S. Department of Labor, who now is resident scholar and economist at the Economic Policy Institute.
Friedan and Gray helped focus the discussion on such questions as: What accounts for the widening income inequality in the United States? Is it due to changes in technology or differences in education, experience and skill? What about the pay gap between men and women -- there had been a narrowing for 20 years and now it is widening; why? And how do these trends affect working people and their families and what are the public-policy implications?
Representing a union perspective, Laden explained that SEIU organizes the lowest of the low-income workers, from janitors to health care workers, with its membership numbering over 1.3 million and growing. She said 80 percent of these workers have very low incomes, no health coverage and, as parents, spend a lot less time with their kids. In contrast, she pointed out that in 1980, 1 percent of the population owned 21 percent of the wealth, while in 1995, the top 1 percent of the population owned 42 percent of the wealth.
"We really feel," Laden said, "that unions are an answer to this situation, especially for women and minorities. Unions help settle grievances, raise wages, keep people off welfare and stabilize communities."
Generally disputing the fact the U.S. income gap is growing and that the gender wage gap is due to discrimination, Kosters argued that discussing the differences in wages between women and men and between the bottom tier of income earners and the higher brackets only addresses the beginning of the story. "The rest of the story," he said, "is about the factors that lie behind this, like work experience, commitment to college, the college experience and the various degrees of commitment to work that individuals have."
Bernstein challenged Kosters' thinking on the gender wage gap. Even when you control for differences between men and women in age, education and experience, for instance, he told the audience, the wage gap shrinks from about 25 percent to about 12 to 13 percent.
"No matter how much you try, you can't make it disappear; it's alive and well and troubling," Bernstein said.
Addressing the diminished narrowing of the gender wage gap, Bernstein used income and policy data from the 1980s to argue that public policy advocates should recognize that low-wage women are very dependent on the minimum wage and it directly impacts their fortunes.
Again disagreeing with Kosters, Bern-stein said, "We have evidence that raising the minimum wage has not resulted in a negative downturn in employment prospects of low-wage women workers, but in fact their labor force participation has increased substantially."
Gray presented her research results on the gender wage gap and the income gap in the United States, emphasizing what ILR professors Francine Blau and Lawrence Kahn have dubbed "swimming against the stream"-- the narrowing of the gender wage gap while income inequality increases. "Although the gender-pay gap is universal, why is it higher in the U.S. than in other countries," asked Gray. She discussed studies by Blau and Kahn that have found that the differences in wage structure among different countries may reveal an even stronger influence on the gender wage gap than specific gender differences. In countries with more centralized wage policies than the United States, like Sweden, wage inequalities are less, Blau and Kahn have written, and union contracts, minimum wage laws, among other factors, tend to compress the gap by bringing up the lower income bracket.
A lively debate ensued between panelists and audience members around issues such as whether or not the gender wage gap and its relation to the income gap is due to gender-specific factors, such as occupational segregation and discriminatory practices, or to broader factors such as wage structure, minimum wage and union density, among others.
Although opposing viewpoints were heard, most attendees and panelists seemed to agree on several strategies for addressing the issue, such as strengthening the Equal Pay Act through stronger enforcement legislation; further examining the contribution of internal stratification among women and men in occupations on the income gap; recommending policies that help unions; and further examining stress among dual-wage earning couples and what can be done about it.
The next session of the New Paradigm series will be May 27 at the Carnegie Center, when the topic of debate switches from economics to culture. Panelists will challenge the conventional definition of success in American culture and society, based strictly on financial growth, while looking to considerations such as family, community and the meaning of work. For more information on the series, contact Briana Barocas at (212) 340-2867, e-mail bb11@cornell.edu.
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