Changing the fortunes of America’s workforce: A human-capital challenge
Rising income dispersion in the United States and other advanced nations has become a source of concern. Since the early 1970s, incomes for the highest US earners have raced ahead, while those at the bottom of the income distribution have stood still and those in the middle barely increased. Strikingly, even in the current recession, this underlying trend is not reversing.
In an effort to provide a comprehensive, well-founded explanation to policymakers and other interested parties, the McKinsey Global Institute and McKinsey Social Sector Office have conducted a study of changes in income dispersion and their causes from 1991 to 2005, the height of the economic cycle. The study analyzed a broader, deeper data set than previous research in the area, making it the first attempt to estimate the contribution to rising dispersion of fundamental changes in the US economy’s mix of industries and occupations. Its findings show that redeveloping America’s human capital should be the focus of labor market policy coming out of the recession.
Interesting research, indeed.