July/Aug 1997

ARTICLE TOOLS

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(Third of three parts; click here to read Part 2)

Newcomers in the conversation have also brought fresh insights on three other issues--wage erosion, increasing job insecurity, ballooning CEO salaries--suggesting that current worries are overblown. As to wage erosion, worker cash income may be down, but noncash benefits (pension plans, health insurance, profit sharing) are up. As to job insecurity, in 1991 the average number of years men were remaining in their jobs was five years, compared to four years in 1951. For women, the respective figures are four and two. This evidence does not support the claim that job tenure has shortened. (Obviously, some people do get "downsized." More than half of them, though, end up getting new jobs that pay more.) As for the concern about exploding CEO pay, it certainly is clear that some CEOs make bundles of money. In my extensive review of the literature, though, I noticed that no study of the differences between CEO and "average Joe" compensation examined more than 30 companies. One study prominently featured in U.S. News & World Report was based on a tiny sample of only 10 companies! What this suggests is that, in a very limited number of companies, hyperinequality exists. Whether hyperinequality is a widespread problem has yet to be shown.

Besides offering these various correctives to the conversation, the newcomers also have enriched the discussion with five new topics. First, they've reminded us that envy is just as serious a sin as greed. To date, the inequality discussion has emphasized the latter but neglected the former. Consider economist Paul Krugman's concern that increasing economic disparities mean that more people, as they compare themselves to the "big winners" in the ...