The United States ranks fourth in income inequality after Chile, Mexico and Turkey. In the U.S. the best-off 10 percent make on average 15 times the incomes of the poorest 10th, compared to a six to one ratio in the Nordic countries, Austria, Hungary and Switzerland.

The OECD report cites the U.S. earned income tax credit as an explanation for a sharp increase in the hours worked by low-wage Americans.

The tax credit, the largest U.S. program to alleviate poverty, is meant to be an incentive to work, but it may also contribute to poverty, effectively holding down wages of all low-skilled workers. Now how is that?

Imagine that more people whose skills limit them to low-paid work decide to work more hours so they can get the credit. Add in people who have the skills for better-paid work but cannot find it and so take lower-paid jobs because of the implicit supplement to their wages provided by the earned income tax credit.

The result is more workers seeking more work, allowing employers to hold back wage increases or even reduce wages because of the enlarged supply of labor. The employers benefit. The American median wage, in 2011 dollars, has hovered at just above $500 per week for more than a decade.

Add in the elimination of America’s largest welfare program 15 years ago, Aid to Families with Dependent Children, and the labor market is flooded with single mothers with few job skills. This not only holds down their pay, it also tends to depress the wages of all low-skilled workers.

DECENT LIFE UNAFFORDABLE

A pernicious problem in America is people who work but whose wages are too low for them to afford a decent life.

One in four Americans earns low wages — less than $11 an hour. Among modern countries only South Korea has a larger share of its workers in low-wage jobs and then only by a smidgen, according to a new study by John Schmitt of the Center for Economic and Policy Research, a liberal leaning economics policy organization in Washington.

Schmitt’s work shows that the share of American workers earning less than two-thirds of the median wage has been slowly increasing since 1980, a trend that also goes to the decline of unions due to anti-worker laws enacted by Congress.

The problem is not indolence, the OECD report shows.

America’s lowest paid workers, the bottom fifth, are working far more than they once did. In 1986 they put in 1,030 hours, a bit more than half time. By 2004 they were up to 1,300 hours. That is an increase of 26 percent.

Significantly, in almost every other country in the OECD study, hours worked by the poor fell.

DEPRESSED WAGES

The data indeed show that the flood of low-income workers, especially single mothers, is depressing the wages of all low-skill workers. One of four Americans with a job earns less than $15,000 and average income is less than half that.

Research by Professor Bruce Meyer of the University of Chicago Harris School of Public Policies shows that the largest increase in low-wage work was among single mothers with three or more children. In place of AFDC, as it was known, Congress in 1996 adopted Temporary Assistance to Needy Families with a maximum of 60 months of assistance.

Providing day care for children or poor working mothers has become a growing subsidy expense borne heavily by federal and state governments. In many cases the cost of child care, especially when a single mother has two or more children, exceeds what she can earn even working fulltime.

The earned income tax credit has grown rapidly and now benefits 26 million low-income individuals and families, primarily single parent households. The annual cost is approaching $60 billion.

Milton Friedman, the Nobel prize-winning Chicago School economist, proposed what became the EITC, a form of negative income tax, to encourage people to work. He noted that many people on welfare faced marginal tax rates of more than 100 percent if they left the dole for low-wage jobs. President Ronald Reagan championed the EITC because it required people to work to get benefits.

The credit provides its greatest benefits to people making from about $10,000 to $14,000. Earn more and the credit falls off. Work 1,300 hours at $10 an hour and you are in the sweet spot to get the biggest tax credit. Work an extra week and benefits slip.

If the earned income tax credit, combined with the end of welfare as we knew it, hold down wages for low-skill workers then it is time to find smarter ways than Chicago School theories to reduce poverty for those who work.

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David Cay Johnston is a Reuters columnist.

Men’s median total income in 2010 was $1.54 for each dollar women received, my analysis of new US Census data shows. The median — half make more, half less — was $32,137 a year for men, $20,831 for women.

Ignoring investment and other income, at the median men were paid $1.29 to the dollar earned by women in 2010. Men made $47,715 a year, women $36,931, a difference of $207 per week.

Among nonprofit executives and managers, men make much more than women in the same occupations.

Women run a majority of organisations with budgets under $1 million, but as budgets grow the ranks of women shrink. At nonprofits with budgets of $50 million or more, only one in six is run by a woman and as a group those women are paid 25 percentage points less than men, according to the 11th annual nonprofit pay study by Guidestar, a project I long ago urged on its founder.

All of which raises a question: Why do men, especially married men, put up with this? Why aren’t men in the vanguard of demanding equal pay for women?

It is unfair to the women they love. Viewed in purely selfish terms, pay discrimination limits a family’s resources.

And what about fringe benefits? Many couples lose the value of a second health or other benefit plan because plans designed in a one-income era are often incompatible with one another.

TWO GENERATIONS

We have been through two generations since women began to break out of the narrow list of white-collar occupations readily open to them — teacher, nurse, librarian, secretary.

Some women now work in better paid blue-collar jobs that long had a 100 percent male quota, including machinist, mechanic and stevedore.

The first women who fought to become cops are now retired, some with granddaughters patrolling the streets. Women captain jetliners, while men serve coffee to passengers. My wife runs a quarter-billion-dollar charitable endowment, the kind of job she was bluntly told three decades ago a woman would never hold.

While the pay gap has narrowed some, the official data still show that whether they are sales clerks or CEOs, servers or surgeons, women overall make less than men doing the same work.

Yet women are still more likely than men to be poor, especially in old age, the new census data show. Among single women, one in nine lives in extreme poverty with income below half of the poverty line.

Before Ms. magazine was a gleam in Gloria Steinem’s eye, men had quite a deal. Married middle-class men often controlled the purse while enjoying the pleasures of a full-time homemaker who might work a few hours here and there for “pin money” they could spend on themselves. Mothers of small children seldom worked full-time.

EXTRA MONEY AT A PRICE

Married couples with children in 2009 worked 492 more hours than in 1979, a 15 percent increase, census data analysed by the Economic Policy Institute shows. The extra money comes at a price: less time for the joys of parenting, coupling and community engagement.

Why have men quietly given up all those perks, and the power that goes along with being sole breadwinner, for three-quarters of an extra paycheck? For fathers, that can mean half an extra paycheck or less once childcare costs are covered.

Since most men’s wages have been flat to falling it takes two incomes to get by. IRS data show that average income in 2009 was back at the 1997 level when inflation was taken into account. In 2010 median household income fell again, new census data show.

The women’s movement encouraged self-reliance — not being dependent on the goodwill and good health of a husband — as well as self-realisation. Equal pay for equal work was central.

The price of pay discrimination stalks retirement, too, since less pay means less in old age. Among Baby Boomers, the youngest of whom are now 47, single women have a retirement savings shortfall nearly twice that of single men, the Employee Benefits Research Institute estimated.

Among men age 65 or older, median income in 2009 was $25,409, two-thirds more than the $15,209 median for women, the Congressional Joint Economic Committee reported in April. Retired men averaged nearly twice as much from pensions as women.

Married men and fathers can help close these economic chasms. Will self-interest motivate us to challenge enduring economic discrimination against our wives and sisters, our mothers and daughters? Or will the gender income and pay gaps still be around two generations from now?

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David Cay Johnston is a Reuters columnist.