Income Inequality
The percentage of foreign-born residents of the US rose from 5% in 1970 to 12% in 2006, during which time income inequality increased.
This wave of immigration exerted a mild downward pressure on the wages of native-born low-skilled workers but its primary impact on inequality was due to the increased number of less-skilled workers. According to the Robert Lerman (”US Wage-Inequality Trends and Recent Immigration“), excluding recent immigrants from the analysis would eliminate roughly 30% of the increase in adult male annual earnings inequality between 1979 and 1996. These immigrants experienced large wage gains as a result of relocating to the US, however. When Lerman included recent immigrants and their native-country wages in his calculations, he found equality had increased
rather than decreased.
In 1950, the labor force participation rate for women was 34%. By 1970 it had climbed to 43%, and by 2005 it had jumped to 59%. This exacerbated household income inequality: Now richer men are married to richer wives. Between 1979 and 1996, the proportion of working-age men with working wives rose by approximately 25% among those in the top fifth of the male earnings distribution, and their wives’ total earnings rose by over 100%. According to a 1999 estimate by Gary Burtless (”Effects of Growing Wage Disparities and Changing Family Composition on the US Income Distribution“), this phenomenon explained about 13% of the rise in income inequality since 1979.
“Nostalgianomics,” by Brink Lindsey