Abstract
The topic of inequality is widely discussed during present days by economists and the policymakers, resolving inequality as a long contentious matter. Despite experiencing its detrimental effects on society, few countries around the world have been able to overcome this challenge effectively. American award winning writer, George Packer, considers inequality as a single biggest problem faced in the United States. Taking into account the complexities in resolving this issue, Janet Jalen, presently serving as the Chair of the Board of Governors of the Federal Reserve System stated in 2006 that “Inequality has risen to the point that it seems to me worthwhile for the U.S. to seriously consider taking the risk of making our economy more rewarding for more of the people.” This alarming statement from then President of Federal Reserve Bank of San Francisco came at a period when the U.S. economy was booming.
Globalization has indeed been a major factor behind growing inequality in the United States. The country intensively exports goods and services that require skilled labour and intensively imports goods that require less skilled labour. While skilled workers, managers and executives have gained, the well-paying manufacturing jobs have steadily declined over the decades as foreign produced goods have been in more demand. During the same period, technological advancement has allowed employers to find workers from different parts of the world to perform computer based tasks which has also led to a decrease in demand of domestic workers.
