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Financialization, the Great Recession, and the Stratification of the US Labor Market

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  • Philip Arestis
  • Aurélie Charles
  • Giuseppe Fontana

Abstract

This contribution explores the possibility that the financialization of the US economy has created identity preference effects by linking managerial and financial occupations to high earnings, and in turn high earnings to the social status of the dominant demographic group in the labor force, namely white men. The empirical results for the 1983--2009 period confirm that a wage premium exists for individuals working in managerial and financial occupations, and that this finance wage premium is not equally distributed among all gender and ethnic groups. For each ethnic group, men have taken an increasing share of the finance wage premium at the expense of women. More specifically, white -- and, to a lesser degree, Hispanic -- men have enjoyed a disproportionate share of the finance wage premium. Financialization has thus been neither race nor gender neutral, and is at least in part responsible for the stratification effects of the Great Recession.

Suggested Citation

  • Philip Arestis & Aurélie Charles & Giuseppe Fontana, 2013. "Financialization, the Great Recession, and the Stratification of the US Labor Market," Feminist Economics, Taylor & Francis Journals, vol. 19(3), pages 152-180, July.
    • Handle: RePEc:taf:femeco:v:19:y:2013:i:3:p:152-180
    DOI: 10.1080/13545701.2013.795654
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    References listed on IDEAS

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    1. Jon D. Wisman & Barton Baker, 2011. "Increasing Inequality and the Financial Crises of 1929 and 2008," Working Papers 2011-01 JEL classificatio, American University, Department of Economics.
    2. Jon D. Wisman & Barton Baker, 2011. "Rising Inequality and the Financial Crises of 1929 and 2008," Perspectives from Social Economics, in: Martha A. Starr (ed.), Consequences of Economic Downturn, chapter 0, pages 63-82, Palgrave Macmillan.
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    Cited by:

    1. Aurelie Charles & Damiano Sguotti, 2021. "Sustainable Earnings: How Can Herd Behavior in Financial Accumulation Feed into a Resilient Economic System?," Sustainability, MDPI, vol. 13(11), pages 1-19, May.
    2. Khalil, Sana, 2018. "Reanalyzing the gender-specific effects of the Great Recession," MPRA Paper 95500, University Library of Munich, Germany.
    3. Giovanni Razzu & Carl Singleton, 2018. "Segregation and Gender Gaps in the United Kingdom's Great Recession and Recovery," Feminist Economics, Taylor & Francis Journals, vol. 24(4), pages 31-55, October.
    4. Mathieu Dufour & Özgür Orhangazi, 2016. "Growth and distribution after the 2007–2008 US financial crisis: who shouldered the burden of the crisis?," Review of Keynesian Economics, Edward Elgar Publishing, vol. 4(2), pages 151-174, April.
    5. Luyi Han & Stephan J Goetz & Daniel Eades & Jason Entsminger & Doug Arbogast, 2023. "An early assessment of COVID-19’s impact on tourism in U.S. counties," Tourism Economics, , vol. 29(5), pages 1355-1375, August.
    6. Giampaolo Gabbi & Elisa Ticci, 2014. "Implications of financialisation for sustainability," Working papers wpaper47, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    7. Pasquale Tridico & Walter Paternesi Meloni, 2018. "Economic growth, welfare models and inequality in the context of globalisation," The Economic and Labour Relations Review, , vol. 29(1), pages 118-139, March.

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