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Occupational Tricks or Treats - 10/31/16

Today, some people will enjoy treats, some will suffer tricks.  It’s not really that different from the functioning of the labor market.  A recent article by Josh Zumbrun asks us to imagine two workers who are the same age, gender, race, have similar educational backgrounds, live in the same community, work in the same occupation and industry. 

One would think that over time, these two individuals will have similar earnings, but in practice, they don’t.  According to a new paper from Harvard University’s Richard Freeman, the reason is that over the years, inequality is expanding between workers at different companies. 

Some companies are incredibly successful – the workers at those companies benefit tremendously from that shared success.  Other companies enjoy more mundane existences.  Here is how Professor Freeman explains rising income inequality: " The earnings of workers with near clone similarity in attributes diverged so much by the place they worked that rising inequality in pay among employers has become the major factor."  

Anirban Basu, Chariman Chief Executive Officer of Sage Policy Group (SPG), is one of the Mid-Atlantic region's leading economic consultants. Prior to founding SPG he was Chairman and CEO of Optimal Solutions Group, a company he co-founded and which continues to operate. Anirban has also served as Director of Applied Economics and Senior Economist for RESI, where he used his extensive knowledge of the Mid-Atlantic region to support numerous clients in their strategic decision-making processes. Clients have included the Maryland Department of Transportation, St. Paul Companies, Baltimore Symphony Orchestra Players Committee and the Martin O'Malley mayoral campaign.