Since 1973 the real earnings of those with a high school degree or less has gone
ID: 2428873 • Letter: S
Question
Since 1973 the real earnings of those with a high school degree or less has gone down in the US. The causes include increased low-skilled immigration, greater foreign competition in low skilled manufacturing (including the outsourcing of previous US jobs), the reduction in US unionism and the decline in the real value of the minimum wage. These all amount to a decline in demand for low wage labor or an increase in its supply generating a continued downward inluence on unskilled earnings. Should the government respond? If so, how?
Explanation / Answer
The government can respond by creating more low skilled or manual jobs in order to meet the increasing supply of low skilled workers. Or, the other solution could be limit the inflow of low skilled workers or even the foreign capital in order to prevent increasing competition among the domestic labor market.