Tuesday, July 11, 2006

Article: Economic Gap Growing

The Post has a good article and graphic about wage growth in the Washington region based on the Occupational Employment and Wage Estimates (a great site to visit before your next interview). The rich are continuing to get richer, and the poor are treading water. So who will be the first up against the wall, come the revolution?

click on picture to enlarge

The answer is... no one.

Roughly 20% of Washingtonians are doing really, really well. They earn around $100,000 or more, and their wage growth is somewhat above inflation. These are lobbyists, engineers, and successful business people. They tend to be highly skilled, highly educated, and in demand.

Roughly 20% of Americans are well off. They earn around $60,000 a year, and have been seeing the strongest wage growth. They have college educations and maybe some specialized training, and have seen a huge increase in demand in the last five years. Government has been expanding rapidly (the most common Government Scale position, GS-12, pays $65,000+ per year), and business have been computerizing and outsourcing their lower level positions. This sucks for the 67% of non-college educated Americans.

But while most of the burden from those workers is being computerized or shipped to India, those computers need skilled workers to run them, mid-level administrators to track them, and managers to get the stuff produced overseas back to America where people actually buy them. So in a perverse way, outsourcing is great for keeping inflation down and good for wage growth, as long as in the middle, and not the bottom, of the barrel.

So there will be no great social or political upheaval, because roughly 40% of the population is doing just fine. And there is enough opportunity and upwards churning from the bottom 60% that they want the current system to basically stay the way it is. The receptionist of today thinks she might be a lawyer tomorrow, even if the chances that she will ever really make it to law school are rare.
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