Is the Wage Gap a Red Herring?

The release yesterday by the Labor Department of data showing that the top 10% of wage earners experienced a 7% growth in their wage levels during the last 11 quarters while those in the bottom 10% experienced only a 2.5% growth in wages has generated a firestorm of controversy centered on the proposition that income inequality needs to be reversed. The data play into the hands of the Obama administration and its quest for a higher tax rate to be imposed on the "wealthy." Income inequality is an unintended consequence, and in fact a good unintended consequence, of America's movement away from a manufacturing-based economy to become a knowledge and service-based economy. Pining back to the good old days in the 1950s when CEO compensation was closer to the wages of the worker on the factory floor ignores the technological and scientific progress our society has achieved in the past half-century. The $1 billion transaction between Facebook and Instagram, a less than two year old company...(Read Full Post)