Wage disparity is a term used to describe the differences in wages between individuals due to factors such as gender and location. This is despite the fact that all these individuals are subjected to a similar job description. This issue of wage disparity has remained persistent and controversial especially in the USA. Subsequently, this has triggered scholars into carrying out researches in order to table the facts of wage disparity in the USA.
According to Hill and Wolman (1997), larger income disparities in a region lead to a lower per capita income. This was confirmed through the studies carried out between 1980 and 1990 in the USA. The studies compared the changes in income disparities between US Central cities and their suburbs. The wage disparities also impact economic performance directly; such that the larger the wage disparity, the lower the rate of economic performance. This was especially confirmed by the employment levels.
Steelman and Weinberg (2005) sought explore the drivers of wage disparities in the USA. This was triggered by the increasing income distribution gap. Their study was also largely based on the findings of Richmond Fed and Giovanni Violante. These studies indicated that technological advancements, globalization and early life education are the main factors contributing to wage dispersion. This implies that the value of skilled labor has increased while that of unskilled labor has continuously deteriorated.
Smeeding, Rainwater and Burtless (2001), sought to examine the reasons behind the high-poverty levels in the USA as compared to its high per capita income. The study also compared the poverty levels of USA with those of other developed nations. It was evident that the high income and wage disparity in the USA was the main contributory factor.
Another study carried out to determine the male-female wage disparity trend indicated that the gap was slowly closing. Unlike in 1980s and early 1990s, it was evident that the wages offered to young women currently have been slowly increasing as compared to those of their male counterparts. This was greatly attributed to the gender awareness programs that have been fighting for equality irrespective of the gender. The four studies clearly indicated that wage disparity is persistent in the USA.