Ever since *The Bell Curve*, those of us in ethnic studies find ourselves needing to know more about wage inequality in the US. Well, I have been following this debate between Paul Krugman and Ethan Kapstein and others; Krugman has recommended the work of Robert Lawrence. So I read about half of his Brookings Institute report today (Single World, Divided Nations: International Trade and OECD Labor Markets?). Confronted with the problem of wages not keeping up with productivity, Lawrence attempts to reconceptualize the data. First, he says we should look at real hourly compensation in the business sector, instead of real average hourly earnings; the former has increased by almost 9%, while the latter has decreased by 15% between 1973 and 1994. Why? This category "real compensation" includes supervisory workers and it includes "fringe benefits" which are doubtless enjoyed disproportionately by supervisory workers. Isn't Lawrence merely using data which will mask the exploitation and oppression of the proletariat? Then Lawrence seems to engage in question-begging. He argues that productivity increases have brought producer goods prices down but not consumer goods prices; hence if workers had consumed what they produced, their real compensation would have kept up with productivity. But doesn't this just raise the question of why cheaper producer goods inputs did not have the effect of bringing consumer prices down as well? It doesn't seem that Lawrence even raises the question, much less answer it. Am I missing something? I won't yet get into why the central topic of the book seems to me to be about a false debate-- whether globalization or techno-organizational change has been responsible for the declining relative fortunes of "unskilled labor". Nor will I yet ask whether this categorization of workers as unskilled does not imply a false theorization of the problem--that educational deficiency or human capital investment-averse behavior (is that the right phrase?)is the efficient cause of the problem. Rakesh Ethnic Studies
