Created Unequal: The Crisis in American Pay

Economists of every ideological stripe acknowledge that wages have grown increasingly unequal since 1970 in the U.S. Galbraith (Balancing Act), a professor of economics at the University of Texas and a former Executive Director of the Congressional Joint Economic Committee, considers that widening gap--between the very rich and the middle and working classes--dangerous to our democratic ideals, and he is passionate in his quest to identify the culprits. The popular explanation for the trend, he notes, is that high-tech workers garner the majority of wage gains (due to superior productivity in companies fulfilling strong market demand) while workers subject to less felicitous market forces lose ground. Spotting anomalies in that argument, Galbraith dives into U.S. Department of Commerce data and, using ingenious analysis, finds six factors responsible for the trend: unemployment, the exchange rate, inflation, economic growth, the interest rate and the minimum wage. Since all six are candidates for artful manipulation (whether by Congress, the Executive or the Federal Reserve), why, Galbraith asks, have we been passive for 25 years in the face of rising wage inequality? He then unveils an action plan that will cause heated debates in corporate board rooms and in Washington, if not in the media. The data crunching that shores up Galbraith's position may prove daunting to some who gave up on Econ 101, but the numbers, charts and graphs are moderated with rousing tributes to Adam Smith, Joseph Schumpeter and John Maynard Keynes, economists who were revolutionary social critics as well as shrewd bean counters. (Aug.)