Scott Schaefer
Reporter Lois Collins did a nice job summarizing the facts, so I won't repeat them here. But I will add a little about some theories on why this might be happening.
The leading theory among economists is something called "skill-biased technical change." The idea is that production technologies --- that is, the way we make good and services --- have changed. And they've changed in such a way as to make the skills of very educated people (think of college graduates and those with graduate degrees) more valuable relative to the skills of somewhat educated people (think high school grads).
If your skills become more valuable, then employers will be willing to pay higher wages to try to hire you. If your skills become less valuable, then employers won't be as eager to hire you, so your wages won't grow.
Why might this have happened? Computerization is one possible answer. A computer isn't a good substitute for a truck driver. But a good piece of accounting software is a good substitute for a bookkeeper. So, maybe in 1980, a CFO needed a staff of ten bookkeepers to track accounting numbers in a large firm. By 2005, though, a similar CFO could do the same work with only five bookkeepers. Computers substitute for bookkeepers, and therefore make bookkeeping skills less valuable. (Read more)
Asher Curtis
