For several years, part of the prevailing issues financial issues in the US is the inequality in the earnings of its citizens. This conflict has long been a concern, especially with its continuous rise. Many have attempted to assess the matter to find out where it is rooted and among these is the McKinsey Global Institute, who recently conducted a study based on people whose salary either remained flat or have decreased between 2005 and 2014, where a large portion of households experienced a drop in their compensation. This period also saw a large difference in the income growth enjoyed by the public after the WWII.

According to the report, various factors have given rise to this problem, which mainly originated from the financial crisis in the year 2000-2009. Following this, the global economy has struggled amid one of the worst recessions, and encountered dull recoveries after getting past it. During this time, the country’s GDP averaged only 2.2%, signaling the most sluggish expansion after the war. Another burden was that inflation-adjusted salary hardly increased with the total payroll earnings per hour hiking up for only 2.1% annually.

Moreover, the decline in wage share is also to blame. This is a fraction in the national income that is paid in the form of wages. Prior the crisis, an estimated 18% of the GDP progress went to a raise in compensation--a figure that slipped 4% seven years after the stagnation.

Demographic changes contributed to the inequality in earnings as well. The report unveiled that majority of the population sections that encountered a decrease in income were more harshly affected. This sector covers the less educated laborers, single mothers, and younger employees. The figures inferred that these class have received relatively lower salaries.

The popularity of automation is probably a major variable that caused the disparity in wages. As modernization took place, the labor industry also went through shifts, and one of these is the replacement of workers by machines or robots. The trend of personal computers entering companies to perform office and factory jobs have robbed individuals of their jobs, especially since these equipment gets the task finished at a faster rate.