from Renewing America

Inequality Starts With Your Employer

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September 24, 2014

Revision3 worker cubicle
Blog Post
Blog posts represent the views of CFR fellows and staff and not those of CFR, which takes no institutional positions.

Discussions of inequality often focus on the pay gap between executives and lower-level employees. However, in a new column for Bloomberg View, CFR Adjunct Senior Fellow Peter Orszag highlights new research showing that variation in salaries across different companies is actually the largest driver of inequality. This finding may help explain the decline in job-related mobility among Americans. Once a worker finds a high-paying company, they are less likely to leave. This limits opportunities for workers in lower-paying companies to make a move into a higher-paying one, and therefore decreases the incentives to move across state lines to find a new job.

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