Citation

Cormier D, Craypo C. Camb. J. Econ. 2000; 24(6): 691-708.

Copyright

(Copyright © 2000, Cambridge Political Economy Society, Publisher Oxford University Press)

DOI

10.1093/cje/24.6.691

PMID

unavailable

Abstract

This paper examines the connection between working poor households and industrial restructuring in the US as a whole and three Midwest manufacturing cities. It question the conventional labour economics argument that a main reason for the substantial rise in low-wage jobs in the US is 'skills mismatch'. This follows from the basic contention that people are paid what they are worth in an unrestricted economy. However, labour market segmentation theory poses a broader range of factors as determinants of labour market outcomes, including industrial structure and the bargaining power of individuals and groups of workers relative to employers. The paper first examines the nature and extent of globalisation, i.e., the transition from manufacturing to service and retail sectors, and a major consequence, growing income inequality. Government data are used to provide measures of deindustrialisation and income inequality. Government data are used to provide measures of deindustrialisation and income inequality. It then reports on findings from a four-year study of the working poor in South Bend, Indiana, one of the three cities studied in the first part. Evidence presented in the paper supports segmentation thinking and indicates that other factors beyond individual resources influence labour market outcomes, which are outside the control of workers, especially the working poor.