By John Schmitt
Center for Economic and Policy Research
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The economics of "economic distribution" is not only relevant to politics but also to investment. Given that the US has a such a large share of low-wage earners and the share of that has been trending up for 20 years, it is good news for companies cater to that segment of the demographics like the Wal-Mart and Dollar stores of the world.
 According to the OECD, in 2009, about one-fourth of U.S. workers were in low-wage jobs, defined as earning less than two-thirds of the national median hourly wage. |
 Not only has the U.S. the highest share of low-wage workers in the OECD countries, the incidence of low-wage work has been rising for at least three decades, from just over 20 percent in 1979 to just under 30 percent in 2010. |
 The minimum wage in the U.S. has been set at a level that is well below the threshold for low-wage work. As a result, it has had little or no impact on the share of the workforce experiencing low pay by the standard definition. |
 The Federal program, the Earned Income Tax Credit (EITC) which reimburses low-income earners (27 million families, $60 billion in 2009 with complicated eligibility rules (max benefit 4.8K and max earnings 39K) may have exacerbated the low-wage problem in the U.S. because it increased the supply of low wage workers who then do not become eligible for the EITC or get the EITC that is too small. |
