Declining industries show rising earnings inequality

Evidence

Table 4 also shows that industries with a higher concentration tend to have lower earnings dispersion in the later period. The effect is robust between 1970 and 1997 but inconclusive between 1999 and 2008. Although perhaps counterintuitive, this finding resonates with a recent cross-national finding that employment concentration is negatively associated with the level of income inequality ðDavis and Cobb 2010Þ. Furthermore, table 4 shows that industries with shrinking relative employment tend to develop higher earnings dispersion. In other words, industries that are declining are more likely to experience subsequent surges in the level of income inequality. — Ken-Hou Lin & Donald Tomaskovic-Devey, Financialization and U.S. Income…, 156

Categorization

• CANDY: ‘Industries that are dying are the ones where inequality surges’ is a compact elevator fact.
• SEED: Angle: neglected industry decline, not just growth sectors, may account for aggregate inequality — an under-covered causal direction for an essay.
• XREF: connects to: Financialization raises earnings inequality across most US industries — Ken-Hou Lin & Donald Tomaskovic-Devey, Financialization and U.S. Income…, 152; Wage labour has grown more pervasive even as manufacturing employment declined — Alex Callinicos, Against Postmodernism: A Marxist…, 480

Related

• Financialization raises earnings inequality across most US industries (similarity 0.87)
• Most earnings inequality growth occurred within industries, not between them. (similarity 0.87)
• Financialization independently explains over half of labor’s falling income share since 1970. (similarity 0.85)
• US inequality since 1970 grew mostly within rather than between industries (similarity 0.85)
• Financialization drives earnings inequality nearly as much as declining unionization (similarity 0.84)
• Financialization trajectories diverged across industries after 1997 (similarity 0.84)
• Financialization caused most of the decline in labor’s income share since 1970 (similarity 0.83)
• Inequality dimensions reflect one institutional shift toward financialization (similarity 0.82)
• Deunionization still leaves much wage inequality unexplained, pointing to financialization (similarity 0.81)
• Financial-sector workers’ pay since the 1980s far outstripped national averages, driving inequality. (similarity 0.81)
• Prior research linked financialization to inequality mostly indirectly, not causally. (similarity 0.80)
• Financialization channels income toward the wealthy and depresses productive investment and wages. (similarity 0.80)
• Financialization’s inequality effects accumulate gradually because income dynamics are highly persistent. (similarity 0.79)
• Financialization caused roughly three-quarters of the labor share decline by 1997. (similarity 0.79)
• Counterfactual independence assumptions likely understate financialization’s true inequality impact (similarity 0.79)

Broader Connections

• Financialization raises earnings inequality across most US industries #expands (0.85) — Ken-Hou Lin & Donald Tomaskovic-Devey, Financialization and U.S. Income…, 152
• Wage labour has grown more pervasive even as manufacturing employment declined #corroborates (0.75) — Alex Callinicos, Against Postmodernism, 480