Q&A: Why Care About Income Disparity?

A growing economic divide threatens workplace morale.

By Donna M. Owens Mar 1, 2013
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0313cover.gifA year before the Occupy movement rocked Wall Street and cities across America, journalist Timothy Noah began exploring income inequality. His 10-part series for Slate magazine in September 2010 argued that for three decades, the U.S. has steadily become a nation of haves and have-nots.

The articles earned Noah the Hillman Prize for public-service magazine journalism in 2011, and later a book contract for The Great Divergence: America’s Growing Inequality Crisis and What We Can Do About It (Bloomsbury Press, 2012).

The Harvard graduate, columnist and blogger at The New Republic offers economic data and historical context for his assertion that income inequality is one of the most pressing issues of our time.

How do you define the term “the great divergence”?

I use it to describe an increase in income inequality within the U.S.—the divergence between income growth for the middle class and the affluent.

From about 1932 to 1979 in America, incomes for the middle class grew at least as fast as incomes for the affluent. That stopped in 1979. Today, our incomes are increasingly and drastically unequal: The top 1 percent of Americans collect almost 20 percent of the nation’s income—more than double what they earned in 1979.

What effect does the widening economic gap have on workers?

If median income declines, and if workers don’t share in profits, morale evaporates. When a worker knows he won’t receive a wage increase when productivity goes up, his only motivation for doing a good job is fear of being fired. Income inequality is dispiriting for the worker.

What can HR professionals do to help restore the balance?

When profits are up, HR should be attentive to whether all workers are sharing in the prosperity of the company—not only the top executives and shareholders, but workers, too. That goes beyond cost-of-living increases.

It’s the duty of HR to get top executives interested in this question of whether there’s a sense that profits are being distributed fairly. HR professionals should, at the very least, measure the effect of stagnating wages by compiling data and keeping track of trends and other information that their bosses need to know.

In your book, you write about the failure of U.S. schools to teach technological and other skills American workers need.

The U.S. shortage of skilled labor started in the late 1970s. For the first time since 1900, the supply of college-educated workers began to go down relative to growing demand. Increasingly, there’s an income gap between people with only high school diplomas and people with college or graduate degrees.

What can HR do to promote education and training resulting in a more skilled workforce?

There’s a skills-based divide in America; it’s complex, and it’s rooted in the failures of the educational system and the decline of the U.S. labor movement. A lot of companies are working with community colleges and training programs to train more skilled workers.

Overall, it seems you are suggesting that HR professionals will have to take more of an advocacy role on income inequality. Is this revolutionary or beyond the traditional purview of HR?

No, I don’t think it’s revolutionary. It’s an adjustment. HR is responsible for the well-being of employees. That includes economic issues. It’s merely fulfillment of an existing duty.

The interviewer is a freelance writer based in Baltimore.

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