Source: finance.yahoo.com 
 
            Is "software engineers’ relatively slow wage growth" a typical example of income inequality? "What "change of government policies" has led to the current situation? Only "failure to raise the minimum wage" plus Fed Reserve’s policies of "favor[ing]  low inflation over high employment" and "easing regulations governing  overtime and the use of contract workers"? No more important answers given in the study paper or in the news report? If not, why? Nobody trying to cover up the real reason? Hope so.                                                                                                             -- The New Legalist editor 
 
 
  
 There’s little debate that wages  for the average American household have stalled and wealth is flowing  more heavily to the top of the income ladder.  
  
 There’s less consensus about why-and what should be done about it.  
  
  A new study analyzing more than three decades of wage data argues that  government polices-more than globalization, new technologies or gaps in  education or training-go a long way to explaining the expanding wealth  gap in America.  
  
 "There’s a  lot of uncertainty about the rise in inequality, but we’ve changed a  lot of government policies over the last generation that have pretty  predictable effects on wages," said co-author Josh Bivens, policy  director at the Economic Policy Institute, a Washington think tank  devoted to helping low and middle income households.  
   
  Those policies have become a key focus of the Obama administration,  which is proposing an increase in the federal minimum wage-to $10.10 an  hour from the current $7.25-as part of a broader agenda of boosting pay  checks for lower and middle-income households. 
  
  The new paper, being unveiled Wednesday at an event featuring Labor  Secretary Thomas Perez, is the opening salvo in an EPI research campaign  to focus on wage inequality. 
 
  
  At the root of the debate is a question economists have sought to  explain for decades: the abrupt disconnect in the late 1970s between the  overall productivity of the U.S. economy wage gains for the average  worker.  
  
 From 1948 to 1979,  both hourly wages and productivity roughly doubled. But from 1979 to  2013, productivity rose 65 percent while average hourly compensation  rose just 8 percent, according to the EPI.  
  
And  those at the bottom and middle of the income ladder saw little of those  gains, according to the analysis, because most wage growth has flowed  to the top 1 percent of earners. 
  
 Numerous economic papers have  tried to explain why wage gains further down the ladder have stalled.  Many blame the rapid rise in globalization, which allowed American  companies to move operations to countries where labor is cheaper. Others  cite the rise of technology-from factory floor robots to  smartphones-that have allowed employers to squeeze more work out of the  same number of workers.  
  
  The authors of the paper argue that wage growth for the average  household has been thwarted more by changes in government policies than  by global forces like technology.  
  
  Software engineers, for example, while well paid compared to lower-wage  workers, have seen relatively slow wage growth compared to the overall  gains in productivity-even as demand for their services has expanded,  said Bivens.  
  
 "We think  there’s much less scope for technology to explain these trends," he  said. "But that’s why we think people have given short shrift to the  impact of policy changes."  
  
  Among those is the failure to update the federal minimum wage to keep  up with inflation. In real terms, the spending power of a federal  minimum wage has fallen to levels last seen in the 1960s.  
   
  But the authors also cite Federal Reserve policies that have favored  low inflation over high employment and easing regulations governing  overtime and the use of contract workers.  
  -By CNBC’s John Schoen.  |