). however, studies that examine national data tend to find somewhat larger effects, with a 10 percent increase in the share of immigrants in the total population reducing the wages of low - skilled natives 3 percent to 5 percent ( borjas, 2006 ). international trade, another aspect of globalization, may also have differential effects on the economic well - being of u. s. workers even as it tends to raise real wages and incomes on average. for example, some empirical research suggests that, in the 1980s and 1990s, increased international trade reduced the profitability and hence the demand for labor in a number of industries that employed relatively recently, the red sox paid $ 51 million simply for the right to negotiate with the japanese pitcher daisuke matsuzaka ; they later signed matsuzaka for an additional $ 52 million over six years. illustrating some of the effects of globalization on baseball economics, the city of boston anticipates that increased interest by japanese tourists will bring in some $ 75 million, aside from what the red sox will earn from signing matsuzaka ( reed, 2006 ). more low - skilled workers ( borjas, freeman, and katz, 1997 ; sachs and shatz, 1994 ). of course, trade has increased the potential markets for other domestic industries, leading to higher demand and thus higher real wages for workers in those industries. a related development has been the outsourcing abroad of some types of services and production activities. because labor markets are adaptable, outsourcing abroad does not ultimately affect aggregate employment, but it may affect the distribution of wages, depending on the skill content of the outsourced work. at least until recently, most such activity appears to have involved goods and services that use relatively more low - skilled labor, which ( all else being equal ) would tend through the workings of supply and demand to slow the growth of wages of domestic low - skilled workers relative to those with greater skills ( feenstra and hanson, 1996 ). 9 unfortunately, much of the available empirical research on the influence of trade on earnings inequality dates from the 1980s and 1990s and thus does not address later developments. whether studies of the more - recent period will reveal effects of trade on the distribution of earnings that differ from those observed earlier is to some degree an open question. overall, i read the available evidence as favoring the view that the influence of globalization on inequality has been moderate and almost surely less important than the effects of skill - biased technological change. finally,

indeed, with the well - being of most people in the world today. although average economic well - being has increased considerably over time, the degree of inequality in economic outcomes has increased as well. importantly, rising inequality is not a recent development but has been evident for at least three decades, if not longer. 2 the data on the real weekly earnings of full - time wage and salary workers illustrate this pattern. in real terms, the earnings at the 50th percentile of the distribution ( which i will refer to as the median wage ) rose about 11 - 1 / 2 percent between 1979 and 2006. over the same period, the wage at the 10th percentile, near the bottom of the wage distribution, rose just 4 percent, while the wage at the 90th percentile, close to the top of the distribution, rose 34 percent. 3 in 1979, a full - time worker at the 90th percentile of the wage distribution earned about 3. 7 times as much as a full - time worker at the 10th percentile. reflecting the relatively faster growth of wages of higher - paid workers, that ratio is 4. 7 today. the gap between the 90th and 10th percentiles of the wage distribution rose particularly rapidly through most of the 1980s ; since then, it has continued to trend up, albeit at a slower pace and with occasional reversals. the long - term trend toward greater inequality seen in real wages is also evident in broader measures of financial well - being, such as real household income. 4 for example, the share of income received by households in the top fifth of the income distribution, after taxes have been paid and government transfers have been received, rose from 42 percent in 1979 to 50 percent in 2004, while the share of income received by those in the bottom fifth of the distribution declined from 7 percent to 5 percent. the share of after - tax income garnered by the households in the top 1 percent of the income distribution increased from 8 percent in 1979 to 14 percent in 2004 ( congressional budget office, 2006 ). 5 even within the top 1 percent, the distribution of income has widened during recent decades. 6 the measures of inequality i have cited reflect " snapshots " of a single time period, usually a year. consequently, they may not tell a complete story about the extent of inequality or its trend. for example, the fact that an older, more - experienced worker earns more than a newly hired employee will this result is calculated using the data on compensation