It really gets annoying how all discussions in the media of inequality in the media take the route, where we need the government to act to reduce inequality created by the natural workings of the market. David Leonhardt gave us another of this one today when he speculated about the state of the post-pandemic world.
While much of his speculation his interesting, he hypothesizes that we will see greater corporate consolidation in the post-pandemic world. He then says that this can lead to greater inequality, however he holds out the hope that under a Biden administration, the government might take action to counter this trend.
First, it is important to note that increased corporate profits have been a relatively small factor in the rise of inequality over the last four decades. The vast majority of the upward redistribution was within the wage structure, with CEOs, Wall Street traders and doctors and other highly paid professionals gaining at the expense of ordinary workers. Only of the gap between productivity and wage growth could be attributed to the shift to profits. Furthermore, the labor share had been rising in the tight labor market of the last few years, so this shift could well […]
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