Customer Reviews

Created Unequal: The Crisis in American Pay

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Created Unequal, by James K. Galbraith, is an increadible book. In a time when most economists stick to the supply-side economic mantra, Galbraith breaks free. He gives a leftist view of the new economic order and the exploitation it has caused. He observes that the point of Welfare as it was concieved was never a safety net, as it should have been, but rather a way to insure a constant flow of low wage workers. He points to the growing wage disparities between the top 1% and the bottom 55%. He knocks down popular misconceptions about the growing inequality, including the technology myth. Galbraith tactfully explains that there has always been changing technology and new skills needed, yet the severity of inequality has never been so great. Galbraith also shows how the Fed's policy to keep unemployment at an artificially high, and immoral, level in order to scare off inflation has hurt a great number of people. Galbraith writes in the same progressive vien that his father, John Kenneth Galbraith, perfected. If you want to know why there have been striking economic inequalities in recent years, buy this book!

Editor, Stern's Management Review online, stern@hrconsultant.com Argues that America's wage gap was driven up by public policies shaped by and for the wealthy. Explains the relationship between economic policy and the structure of pay. Shows why knowledge workers have done well and why service worker have not; why consumer industries have lost ground. Shows that differential power, rather than a theory of differential skills, explains inequality in pay. Includes technical notes and bibliography. For those who want to gain insight into inequality in pay this work, by a leading economist, This book is outstanding and filled with technical analysis, insights and supporting data.

Galbraith provides a cogent, well-documented argument that instability has more to do with wage inequality than does a mechanism for market efficiency. "When the ocean is flat, rowboats and dinghies can join the trawlers out on the reef where the fish are running. But in a gale, the little boats sink while the large ones do not." He argues that reasonable wages obtain from low unemployment and that expecting science and technology to act as the "centerpiece of a progressive agenda is absurd." Highly recommended.

Created Unequal begins by telling the reader that the book will discuss the gap between the highly skilled employee and the unskilled. Mr. Galbraith begins by dicussing the chamge in monetary policy since the 1970's and the change in the labor force, as well. Since the 70's more women and minorities have joined the labor force and the U.S. has enjoyed a prospering economy and slipped into a recession. The main focus of the book is discovering what caused such a huge gap between the skilled and unskilled. One possible solution Mr. Galbraith suggests is the rise in the number of college bound and college graduates in the past twenty years. The increase in education has forced employers to pay these higher skilled employees a greater wage. Another possible answer, which directly relates to education, is the advancement of technology, namely the personal computer. As more and more computer were,and are, becoming part of the business world employers needed to find employees who knew how to operate the new machines. In the beginning, these employees were a rare find and thus, could demand a higher wage. This solution, the most popular among modern economists, is rejected by Galbraith. He states that the rise in education came before the introduction of the personal computer. The technicality and dryness of the book was to be expected as it is a study on a dry science. We did, however, find that the book presented a new outlook on the way sociery functions. The gap between the rich and the poor is large, and ever widening. There no longer exsists a middle class who can keep the balance and rock the vote on Republican, rich favoring policies. Mr. Galbraith is an excellent economist who writes technically on a topic of intrest to everyone.

"Created Unequal" is an impressive work of economic analysis of wage and wealth inequality. Although the book occasionally gets into some relatively rigorous economics, it should be accessible to the determined lay reader.

Professor Galbraith's central thesis is that the amount of wage inequality (the difference between what the wealthiest make and what the poorest make) is tied directly to a number of key factors: the unemployment rate, the interest rate, the strength of the dollar, and so on. Essentially, the lower the unemployment rate, the less the degree of wage inequality. I am simplifying his thesis considerably here, but this is the essence of it. There is a considerable amount of technical research presented that supports the thesis and demonstrating a strong correlation between wage inequality and unemployment.

So, Professor Galbraith makes a persuasive case that the government can affect wage inequality by making certain policy decisions, such as lowering unemployment, raising the minimum wage, weakening the dollar against international currencies, and so on.

But, what is missing from the book is a serious justification of why the free market should not dictate the value of labor. In other words, from a normative standpoint, why should workers be paid two or three or more times the value of their labor? There are egalitarian arguments to be made, of course, but at the same time, if the value of Bill Gates' labor is, say, 100 times more valuable than the work of a custodian, why should Gates' wages be limited to, say, 30 times that of custodian? (At one point, Professor Galbraith suggests a 30-1 limitation.)

In the end, this is an impressive and valuable work. You may or may not agree with the policy decisions that Professor Galbraith supports, but his analysis must be reckoned with.

The book, Created Unequal, by James K. Galbraith, was a very informative and factual book, yet seemed to drone on. The book has many chapters in it, each with its own topic. Each chapter was educational, but the facts seemed to be repetitive. Being high school students, we found this book to be extremely challenging. To truly get the meaning of this book, you need to be able to read it slowly and analyze each fact. Without doing so, the book may seem perplexing. The facts, true as they may be, come off as offensive. The countless mentioning of white male dominance could be seen as an insult to any other sex or race. The book brings to your attention the immeasurable amount of inequality in today's society. As terrifying as that might be, we have to deal with this issue everyday. If you are interested in a detailed description of our economic inequality then Created Unequal would be an excellent choice for you to read. If you are uninterested in today's economic crisis, this book may not appeal to you. However long this book may seem, the facts are interesting. Depending on your individual interests it may be worth reading.

I picked up the book and read the whole thing in one shot. It was so refreshing to read that in today's media and economics, which is dominated by views favorable to big business, someone dares write a book that seems almost communist in what it advocates.

One of my own pet peeves is the unfairness of the social security tax. People making over $60,000 a year are not taxed at the income above that amount, under the pretense that social security is some kind of a social insurance system, when in fact it's a taxation and benefit system.

One of the startling facts in the book: 65% of all capital gains are attributed to the top percentile (1%) of the economic population. How fair is it for congress to reduce these taxes below the rates for personal income taxes. As Warren Buffett put it, it's unfair that someone who earns a million dollars by finding a cure for cancer would pay more in taxes than someone who "earned" the same amount by investing in the stock ! market.

Galbraith draws on the theories of Veblen, Keynes and Marx. The works of all three are available on the internet. If you want links, feel free to e-mail me or do a yahoo search.

The best quality of this book was its comprehensive review of the numerous issues surrounding inequality. Galbraith addresses them all while using econometric analyses to determine which are really the most important.

In particular he makes an interesting case about the monopoly-like nature of the technology industry and how it interacts with macroeconomic policy to create inequality.

Unfortunately for a book with many insights and broad appeal, Created Unequal is a very challenging read. It's rambling at times (better summaries or bullet points at the end of each chapter would have helped greatly) and the book assumes an undergraduate level of economics knowledge.

This book looks at a main question in economics prior to the deflation Keynes wrestled with -- the structure of wages. He concludes (i) that not only has a purportedly "natural" rate of unemployment been set too high, way over any "ethical" rate, but also (ii) that such action by government is one of three means of keeping wages low, making the distribution of income and wealth more unequal than it would be in the absence of such deliberate policy.

This has produced a crisis in the management of transfer payments such as Social Security. Jas. GALBRAITH is definitely "ahead of the curve".

The book, Created Unequal, by James K. Galbraith, was a very informative and factual book, yet seemed to drone on. The book has many chapters in it, each with its own topic. Each chapter was educational, but the facts seemed to be repetitive. Being high school students, we found this book to be extremely challenging. To truly get the meaning of this book, you need to be able to read it slowly and analyze each fact. Without doing so, the book may seem perplexing. The facts, true as they may be, come off as offensive. The countless mentioning of white male dominance could be seen as an insult to any other sex or race. The book brings to your attention the immeasurable amount of inequality in today's society. As terrifying as that might be, we have to deal with this issue everyday. If you are interested in a detailed description of our economic inequality then Created Unequal would be an excellent choice for you to read. If you are uninterested in today's economic crisis, this book may not appeal to you. However long this book may seem, the facts are interesting. Depending on your individual interests it may be worth reading.