For high school graduates, there has been a reduction in the return of education or a decline in earnings. The college degree for men has become a defense against real income losses, rather than a tool for income growth. Third, the real earnings and, hence, the standard of living of a large proportion of the workforce, especially those with less than a college degree, has steadily declined. During the 1980s, the mean real wage of male high school dropouts fell by more than 18 percent, while male high school graduates suffered nearly a 13 percent loss in real earnings. While these three trends are universally accepted, the source of these trends remains hotly debated.
Some researchers emphasize an increasing demand for skills in a high-technology economy.
Some researchers argue that deindustrialization shifts jobs from goods-producing sectors to the service sector. Unions have historically negotiated wage packages that narrow earnings differentials. The higher rate of union membership has been noted as one reason for the smaller dispersion of wages found in manufacturing. Unions have made only modest inroads into the service economy which may explain in part why earnings inequality in this sector is greater than inequality in the goods-producing sector. As firms restructure toward leaner production, internal job ladders have been destroyed.