The Big Squeeze Book Review - The Rise of Income Inequality

The Big Squeeze
Why American workers are working harder but earning less. Credit: Getty Images

The Big Squeeze: Tough Times for the American Worker by Steven Greenhouse. 365 pages.

This book does a great job of explaining why you feel like you are working harder but earning less. It gives lots of data to show exactly how much the working class has lost in the past three decades - and how much the top fifth has gained. It explains how the onset of competition from overseas, Wal-Mart, and tax policies have contributed to this trend.

It relates many personal horror stories from extensive interviews. It also advises the government on what it should do to correct the situation.


  • Great compilation of data that show how the U.S. standard of living has declined for workers.
  • Great facts to point out how wealth has gone to the top fifth of workers.
  • Highlights the importance of the Wal-Mart philosophy in bringing down the standard of living.
  • Great discussion of the impact of globalization.
  • Good analysis of the role of government - what it hasn't done, what it needs to do.


  • Too many personal stories.
  • Doesn't address that most of world's wealth is in United States. That draws workers from around the world. That's a major cause of illegal immigration. 
  • It doesn't mention how China and other developing countries are overtaking the United States economy. That is a fundamental reason behind the feeling that workers are being left behind. 
  • Ignores the impact of technology on the workplace. Computers and robots are replacing workers. Blue collar workers must get a computer degree to manage the robots that used to do their jobs. 


  • Chapter 1. Worked Over and Overworked.
  • Chapter 2. Workplace Hell.
  • Chapter 3. The Vise Tightens.
  • Chapter 4. Downright Dickensian.
  • Chapter 5. The Rise and Fall of the Social Contract.
  • Chapter 6. Leaner and Meaner.
  • Chapter 8. Wal-Mart, the Low-Wage Colossus.
  • Chapter 11. Outsourced and Out of Luck.
  • Chapter 15. The Not-So-Golden Years.
  • Chapter 16. Lifting All Boats.

Guide Review - The Big Squeeze

Steven Greenhouse, the author of The Big Squeeze and Labor and Workplace Correspondent for The New York Times, does a great job of demonstrating how much middle and low-income workers have lost in the past 30 years. Between 1979 and 2005, household income (after taxes):

  1. Tripled for the richest 1% of households.
  2. Grew 80% for the top fifth.
  3. Rose just 21% for the middle fifth.
  4. Increased a mere 6% for the bottom fifth.

Despite an economic recovery, the number of Americans in poverty increased 15% between 2000-2006. By 2006, nearly 33 million workers earned less than $10 per hour, which provides an annual income of less than $20,614, below the poverty level. During this same time period, average wages remained flat despite an increase of worker productivity of 15%, while corporate profits increased 13% per year. For more, see Income Inequality.

Greenhouse blames corporations for putting profits ahead of workers. U.S. companies must compete with lower-priced Chinese and Indian companies who pay their workers much less.

The United States has lost 20% of its factory jobs since 2000 thanks to outsourcing. Service jobs have increased, but these are much lower paid.

During the 1990s, many companies went public to fund growth. Managers must now produce ever-larger profits to satisfy stockholders. Since payroll is the largest budget item, re-engineering has led to doing more with fewer full-time employees and hiring more contract workers and temps, many of whom are immigrants.

To maintain its "Low Prices", Wal-Mart has set new standards in lowering employee pay and benefits. Since it is the nation's largest employer, its competitors must follow suit to stay in business.

Greenhouse also blames government policies, including tax policies which help investors more than employees, cuts in regulatory agencies meant to investigate labor disputes, and keeping the minimum wage at $5.15 an hour until 2007.