From Other Words:
In reality, of course, markets don’t just reward the enterprising. They reward price-fixers and union-busters, monopolists and folks who are just plain lucky. And if you inherit a grand fortune, the market will merrily heap rewards your way year after year, no matter how lazy you may be.
Markets, in short, don’t follow “natural” laws. They reflect existing power relationships. Those who hold power bend the rules, formal and informal, that determine how markets operate — and who profits the most from them.
Back in the mid-20th century, in both Britain and the United States, average citizens wielded enough power through trade unions and at the ballot box to impact those rules. But that power has ebbed. The rich have rewritten the rules — and lined their pockets.
How profoundly are the new rules — on everything from minimum wages to collective bargaining — depressing wages in Britain and the United States? In the UK today, 20.6 percent of employees work in jobs that rate as “low wage,” that is, pay less than two-thirds the nation’s median paycheck.
Only one other major developed nation in the world — the United States — has a higher share of workers in low-wage work. That U.S. share: 24.8 percent.
Other nations are doing far better at making work pay. In France, only 11.1 percent of workers labor in low-wage jobs. In Norway, only 8 percent. More progressive taxes by themselves, British labor analysts argue, won’t be enough to undo the stark inequality the rule changes of recent years have created.
We can’t, in other words, just redistribute. We need to predistribute — end those marketplace practices that steer the wealth our economy creates away from the people who actually create it.
Read the rest here: http://otherwords.org/predistribute-the-wealth/?utm_source=feedly