Question

Short-Essay Questions

Explain the possible factors that widened the US wage gap?

Why do workers decide to immigrate to the US?

Answer 1

The US wage gap has consistently increased since 1990 and particularly increased since due to the real estate bubble in 21st century. The main reason is that the union power of the workers to negotiate their wages have declined and the workers in modern service sectors have relatively higher bargaining power due to possession of scarce skills. The advent of high tech software industries further made those with possession of specific skills high in demand while keeping wages in blue collar jobs stagnant. Another form of wage gap persistent has been between the males and females and blacks and whites. The women and black are discriminated against by paying lower wages since they may lack education and bargaining power.

Workers immigrate to the US due to availability of better job opportunities compared to most other countries. Even educated and skilled workers like doctors and engineers have very low wages in developing countries due to structural drawbacks and lack of opportunities. They find the opportunities in the US lucrative due to a pay gap between countries biased towards the US. Another reason for migration is the better living standards in the US.