Montana Ethic Project: How to deal with wage disparity

Barkey

Joey and Libby Early

UM economist Pat Barkey talks about “The Montana Wage Disparity.”

This is the 20th chapter of the 32-part video series “The Montana Ethic Project.” This chapter features Pat Barkey, director of the Bureau of Business and Economic Research since 2008, speaking on “The Montana Wage Disparity.” You can watch the whole video below. Here is how it begins:

“I’d like to spend a few moments talking about a problem that is too important to ignore. That is the fact that Montana is a low wage state.

“In fact we are among the lowest in the whole entire economy. It is difficult to speak dispassionately about this situation; it is about how much money people make and that can be quite personal. But we need to speak about this dispassionately as a policy problem if we are to make any progress. It’s not just your low wages or my low wages, it is the entire economy’s low wages and it is a serious problem.”

Here is another, edited excerpt from Barkey’s presentation:

“Many people equate services with low pay, and that is not true. In fact services are the highest paying jobs in the economy, particularly services which require specialized skills. Specialized skills, what do I mean by that? A lawyer has specialized skills above a sales clerk. A lawyer makes more money than a sales clerk because they are specialized. Specialized skills start with our education system. But that is only the first part. They also grow by developing industry and developing niches that can support and grow our work force. Skills are basically our education and our experience.

“Secondly we need specialized demand. By this I mean larger markets. Large markets can support many different types of niches. If you have smaller markets, they require generalist jack-of-all-trades, which typically support smaller wages. So links to larger markets are critical. That is one reason why many economists, many researchers, think that large wages are now and will always be an urban phenomena, and they are very difficult or impossible in the services economy in smaller areas.

“Finally, we should recognize what kinds of companies pay high wages. Of course it depends on industry, but we need to also recognize that it is larger companies which pay higher wages on average. This really bucks the trend of Montana. We think of ourselves with pride as being a small business state. Well, there is a cost to being a small business state. And we have seen that with respect to our wages.”

PERC_Logo_MontanaEthicPERC—the Property & Environment Research Center—is a proud sponsor of the Montana Ethic Project. To learn how PERC’s ideas can help us honor one another’s rights to land, water, and wildlife,visit perc.org.

First week: Project introduction.

Second week: Richard Drake on “Terrorism and the Consolation of History.”

Third week: Mike Gear on “The Value of Athletics.”

Fourth week: Franke Wilmer on “Gender Equity.”

Fifth week: Gordon Brittan on “The Founding Fathers.”

Sixth week: Jim Posewitz on “Montana Sportsmen and the Hunter’s Ethic.”

Seventh week: The Rev. Jessica Crist on “Religion and Politics: Can They Co-exist?”

Eighth week: Chuck Tooley on “The Montana Character.”

Ninth week: Steve Bullock on “Citizens United v. Montana.”

10th week: Carol Williams on “The Imperative for Female Government Participation.”

11th week: Bob Rowe on Technological Development.”

12th weekGeorge Metcalfe on “Economic Development in Africa and Its Relationship to Montana.”

13th weekBruce Smith on “Montana’s Food Economy.”

14th week: Peggy Beltrone on “Montana Wind Energy—Business and Politics.”

15th week: Mark Solon on “Creating an Intermountain West Startup Economy.”

16th week: Bill Yellowtail on “Futuring and Native Leadership.”

17th week: Judy Martz on “Trust in the Lord and He Will Direct Your Path.”

18th week: Bob Brown on “Teddy Roosevelt’s Shadow in Montana’s Big Sky.”

19th week: Gordon Belcourt on “A Montana Native Perspective.”

20th week: Dorothy Eck on “The Montana Constitution and the Right to Know.”

Next week: Thomas Power on “Valuing Montana: An Economist’s Observations.”

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