Question

1. Many economists have argued that one of the results of technological innovation is that wage inequality has increased. What is their basis for believing this? What are the likely effects of innovation in the labor markets for low-skill and high-skill workers in the U.S. economy?

Answer 1

the main basis for believing this is that the increase in technology the demand for people who has adequate skills in understanding and working with technology increased and the demand for people who don't have skills decreased due to automation as a result of which the wage levels of people with adequate skills increased and people with no skills decreased so that ultimately the wage gap between them has increased as a result of which the wage inequality increased. The market for high skilled and low skilled workers have been mentioned in the above case where the demand for high skilled workers increased due to increase in the innovation and the demand for low skilled workers decreased due to automation.