Labour markets across the globe have recently been characterized by rising wage inequality, real wage stagnation or both. Most academic work to date considers each in isolation, but the research in this paper attempts to pull them together, arguing that higher wage inequality takes on an added significance if real wages of the typical worker are not growing, and showing that inequality rises and real wage slowdowns have gone hand-in-hand with one another due to wages decoupling from productivity in the United States and United Kingdom. The lack of growth of real wages at the median in the United States is also shown to be linked to the declining influence of trade unions.
Machin, S. (2016), "Rising Wage Inequality, Real Wage Stagnation and Unions
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