Final answer:
The most significant factor contributing to increased income inequality since 1985 is the increased demand for high-skill and well-educated workers relative to lesser-skilled workers, owing to technological advancements and globalization.
Step-by-step explanation:
The question concerns one of the key economic issues in recent decades: income inequality. Among the factors contributing to the rise in income inequality since 1985, the most notable is a. an increase in the demand for high-skill and well-educated workers relative to lesser-skilled workers. This demand has been driven by technological advancements and globalization, which have dramatically changed the nature of labor markets. Earnings have become less equal, with high-skilled workers enjoying more substantial wage increases relative to low-skilled workers. This shift in wage distribution is reflected by the fact that the earnings of workers with at least a four-year college bachelor's degree have grown significantly when compared to the earnings of workers with only a high school degree.
Technological changes and globalization trends have increased the demand for “stars” in various fields, contributing to a winner-take-all labor market where the top talent commands disproportionately higher salaries. This phenomenon extends beyond mere educational attainment and touches upon the broader issues of talent and productivity. Income disparity is exacerbated when the supply of low-skilled labor exceeds demand, resulting in decreased wages for these workers.
These dynamics indicate that supply for skilled labor is not increasing at the same pace as demand, leading to a greater inequality of wages, thus confirming the correct option in the final answer as Option A.