The United States is a low-wage country. (Here a chorus of Republicans pipes up: Yes, but it’s the greatest low-wage country in the world, and don’t you forget it!) In fact, in 2009 the United States led developed nations, with 24.8 percent of workers earning less than two-thirds of the median income. By comparison, the United Kingdom, Canada, Ireland and Germany all came in at between 20 and 21 percent of workers earning less than two-thirds of their respective median incomes. (Republicans: We’re number one!!!)
John Schmitt of the Center for Economic and Policy Research offers a set of policy conclusions stemming from this observation. A key problem is that the United States has set its minimum wage too low, so that the minimum wage doesn’t exert upward pressure on low wages defined in relation to the median: “In France in the mid-2000s, for example, the minimum wage was set near the country’s low-wage threshold and that country had among the lowest levels of low-wage work in the OECD.” In the United States, though, that’s not the case even in states with minimum wages set well above the federal level.
The growing prevalence of low-wage work in the United States contributes to income inequality from the bottom, just as the increasing wealth of the top 1 percent, and especially the top 0.1 percent, adds to inequality from the top. The middle is a shrinking place, and you can bet that, without a major shift of economic and political direction, its future is not only to shrink but to be squeezed downward.