Inequality dimensions reflect one institutional shift toward financialization

Evidence

The decline of labor’s share of income, the emergence of extraordinarily high executive compensation, and the polarization of the general workforce are all critical dimensions of growing income inequality. Here, we discuss the common explanations of these developments and their potential limitations. It should be emphasized that these explanations are not competing hypotheses in our analytical framework. Rather, we treat them as confounding historical factors that should be addressed in inquiries of inequality trajectories. Indeed, in many ways they are complementary aspects of a broader institutional shift, as the Unites States moved from the postwar capital-labor accord to a global and financialized economy ðRubin 1995; Moller and Rubin 2008Þ. — Ken-Hou Lin & Donald Tomaskovic-Devey, Financialization and U.S. Income…, 25

Categorization

• DEFINE: Introduces the article’s analytical framework: three inequality dimensions treated as complementary facets of a single institutional shift, not competing hypotheses.
• XREF: connects to: Financialization theory links wage-compromise collapse and shareholder value to inequality — Natascha van der Zwan, Making Sense of Financialization, 109; Finance transforms creative talent into a weapon of class war that entrenches inequality — Max Haiven, Cultures of Financialization, 409; Deunionization still leaves much wage inequality unexplained, pointing to financialization — Ken-Hou Lin & Donald Tomaskovic-Devey, Financialization and U.S. Income…, 34 (+2 more)

Related

• Deunionization still leaves much wage inequality unexplained, pointing to financialization (similarity 0.89)
• Financialization theory links wage-compromise collapse and shareholder value to inequality (similarity 0.89)
• Financialization independently explains over half of labor’s falling income share since 1970. (similarity 0.88)
• Financialization drives earnings inequality nearly as much as declining unionization (similarity 0.87)
• Financialization caused most of the decline in labor’s income share since 1970 (similarity 0.86)
• Financialization channels income toward the wealthy and depresses productive investment and wages. (similarity 0.86)
• Prior research linked financialization to inequality mostly indirectly, not causally. (similarity 0.86)
• Financialization raises earnings inequality across most US industries (similarity 0.85)
• Workforce demographics and market concentration shape income distribution independently (similarity 0.84)
• Income inequality reflects relative bargaining power between actor groups, not markets (similarity 0.83)
• Financial-sector workers’ pay since the 1980s far outstripped national averages, driving inequality. (similarity 0.83)
• Counterfactual independence assumptions likely understate financialization’s true inequality impact (similarity 0.83)
• Financialization caused roughly three-quarters of the labor share decline by 1997. (similarity 0.83)
• Structural inequality has redistributed trillions from American workers to the richest (similarity 0.82)
• US inequality since 1970 grew mostly within rather than between industries (similarity 0.82)

Broader Connections

• Financialization theory links wage-compromise collapse and shareholder value to inequality #corroborates (0.85) — Natascha van der Zwan, Making Sense of Financialization, 109