EuroWire January 2020

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finance and other sectors win higher wage premiums. The changes are making city life more challenging for lower-wage workers, who are struggling to accommodate rising housing, heating, travel and living costs. The researchers found that, while cities with “sluggish economies” tend to have weaker wage gains, they also show lower levels of inequality than larger cities, and this is “especially true in cities where the main industries are struggling financially, like Detroit, where automation and auto plant closures have led to job losses.” Some cities that showed the most – and least – inequality in 1980 are still marked by extremes some 35 years later. Fairfield, Connecticut, had the starkest wage gap between rich and poor in both 1980 and in 2015, though arguably more dramatic in 2015. In 1980, a Fairfield resident with earnings in the top 10 per cent made almost six times as much as a neighbour in the bottom 10 per cent. By 2015, those on the high end were earning nine times as much. In conclusion, Josh Bivens, research director for the Economic Policy Institute, believes that lower-wage workers have less leverage than previous generations because of the diminished status of the unions, and because long periods of high unemployment have limited workers’ ability to push for better pay. “In the last 30 years, lots of those things that provided wage growth for low- and moderate-wage workers have been stripped away,” he said.

protect water security and supplies. In Chile, BHP is working to eliminate the depletion of aquifers in the desert regions where it operates. The company’s 2030 goal is to end the use of water from aquifers, and it is investing in desalination plants.

This working life

A report by the New York Federal Reserve highlights growing wage inequality in many of the biggest cities in the United States over the last 35 years. The report, by economists Jaison Abel and Richard Deitz, found that, with the tendency of companies to group in urban centres, the limited pool of in-demand qualified and/or experienced workers are enjoying dramatic rises in salary, with which low to middle-income workers cannot hope to keep pace. Cities such as New York, Houston and San Francisco are topping the ranking for wage inequality, seeing the majority of their workers “being left behind”. For example, in San Francisco inflation-adjusted wages for workers in the top 5 per cent of wage earners grew by 120 per cent between 1980 and 2015, while wages for the bottom 10 per cent of earners grew by only 20 per cent. In New York City, wages grew by 110 per cent for the top 5 per cent of workers, but just 15 per cent for the bottom 10 per cent. Economic inequality has risen across the United States as globalisation and automation eliminate a number of middle-income jobs, while highly skilled workers in technology,

Gill Watson – Features Editor

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January 2020