The Economy

Demand for High-Skilled Workers Not Driving Wage Gap

Even college-educated workers saw a fall in their real wages between 2013 and 2014, says the Economic Policy Institute.
Matthew HellerFebruary 22, 2015
Demand for High-Skilled Workers Not Driving Wage Gap

Employers’ demand for workers with high-level skills and education is not translating into wage inequality, according to the Economic Policy Institute.

The EPI said its review of National Bureau of Economic Research data bucks the conventional wisdom that because there is a shortage of skilled or college-educated workers, the wage gap between workers with and without a college degree is widening.

“There is no sign of a technologically related demand for more-credentialed workers,” the institute concludes. “The workers with the credential that should be in high demand — four-year college graduates — have not done that well, especially in the last year.”

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According to the NEBR’s data on average hourly wages by education, the largest real wage losses between 2013 and 2014 were among those with a college or advanced degree. Workers with a four-year college degree saw their hourly wages fall 1.3%, while those with an advanced degree saw an hourly wage decline of 2.2%.

“If demand for high-skilled workers were driving wage inequality, we would expect to see these workers’ wages increasing or, at the very least, falling less than their low-skilled counterparts,” the EPI said.

Source: Economic Policy Institute