Study: Disparity in private sector driving wage inequality

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Wage inequality has climbed significantly over the last 30 years, largely because some employers have been paying more than other employers, according to a new paper by the National Bureau of Economic Research.

The authors explained that many people have believed wage inequality is due to differences in how employees are paid within a company, but those differences have actually increased “by only a small amount,” the paper said.

{mosads}Using administrative records data from the Social Security Administration, the authors said they found “strong evidence” that wage inequality within firms has “remained mostly flat” over the last 30 years.

Instead, inequality has increased, the paper said, because some top-paying firms have been paying workers more than lower-paying firms.

At the same time, the authors said more research must be conducted to figured out why inequality has climbed between companies rather than within each one.

The paper comes as Democrats in Congress have continued to focus on efforts to raise the minimum wage nationwide. Sen. Patty Murray (D-Wash.), for example, has unveiled legislation that would boost the $7.25 minimum wage to $12 by 2020.

Efforts to raise it in the last Congress failed.

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