Wednesday, March 22, 2006

A Good Paper
What Explains the Widening Wage Gap?
Outsourcing vs. Technology
Claudia Canals
February 2006
the wage gap between
skilled and unskilled workers has increased by 46.55% between 1980 and 1999.

The Math in the Paper seems relatively good to a basic nonmathmetician such as myself, though there are a couple of swift changes in it which may lack for some credance. It is not a question of error, only of emphasis. It still remains a highly creditable effort.

My real concern lies in the choice of Year used, though the Author could not refine the data base as well as could be appreciated--simply for the lack of the data. Conclusion of Period at the height of the Tech Boom is the problem; this Author estimating Skilled Labor to be 8.5% overemployed during this Period. This overemployment led to false presentation of overall Skilled Labor Payscale increases, corrected by Layoffs and Downsizing after the last Recession. This factor will have already foreshorted the Wage Gap between Unskilled and Skilled Labor to some degree, and was not introduced into the equation mix. It was nevertheless a excellent attempt to quantify the total biased technological impact on Wage scales. lgl

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