Ken-Hou Lin & Donald Tomaskovic-Devey — Financialization and U.S. Income Inequality, 1970-2008

64 published claims from this book.

• 1970s crises moved business elites to prioritize capital liquidity over employment stability
• 1999 repeal of Glass-Steagall drove America’s debt and securities explosion
• Celebrity financier reputations predictably collapse when detached from firm fundamentals.
• Conglomerate-era financial management prepared firms for shareholder-value financialization
• Contemporaneous endogenous regressors make concurrent-effect estimates unreliable, favoring lagged specifications
• Counterfactual independence assumptions likely understate financialization’s true inequality impact
• Declining industries show rising earnings inequality
• Deregulation let non-finance firms pursue financial activities, fueling debt expansion
• Deunionization and import competition drive inequality, but computer investment’s inequality effects are uneven.
• Deunionization still leaves much wage inequality unexplained, pointing to financialization
• Early computer-investment effects on executive pay depend on business services
• Earnings inequality is best measured on full-time workers aged 25-55 to avoid compositional noise
• Financial assets enter production functions as an input alongside capital and labor
• Financial earnings at nonfinance firms raise executive bargaining power with boards.
• Financial income reallocates resources away from workers and strengthens owner bargaining power
• Financialization caused most of the decline in labor’s income share since 1970
• Financialization caused roughly three-quarters of the labor share decline by 1997.
• Financialization channels income toward the wealthy and depresses productive investment and wages.
• Financialization coincided with dramatic employment cuts at GE
• Financialization comprises both finance-sector dominance and nonfinance firms’ financial investing.
• Financialization does not measurably raise firm profits or financial-asset productivity.
• Financialization drives earnings inequality nearly as much as declining unionization
• Financialization independently explains over half of labor’s falling income share since 1970.
• Financialization is measured as the ratio of financial receipts to business receipts.
• Financialization may be a root cause behind union decline and offshoring
• Financialization may be the root cause behind deunionization, globalization, up-skilling, and falling investment.
• Financialization raises earnings inequality across most US industries
• Financialization resulted from deliberate deregulatory political choices, not market forces.
• Financialization shifts firm investment from core business toward finance, weakening workers’ claims on revenue.
• Financialization trajectories diverged across industries after 1997
• Financialization’s inequality effects accumulate gradually because income dynamics are highly persistent.
• Firm financial income diverts resources from core production and shifts bargaining power upward
• GE’s finance arm outgrew its industrial parent and dominates its profits
• GM and Ford earned most profit from finance, not cars, by 2004
• Greater import penetration lowers labor’s share of income
• Income distributions reflect actors’ relative bargaining and claimsmaking power.
• Income inequality reflects relative bargaining power between actor groups, not markets
• Industrial concentration raises top officers’ share of compensation while employment size lowers it
• Industry-level financialization trajectories vary far more than macroeconomic accounts showed
• Inequality dimensions reflect one institutional shift toward financialization
• Labor’s share of income declined in the nonfinancial economy from 1970 to 2008
• Major nonfinancial corporations shifted their earnings toward financial operations
• Marginal productivity accounts of executive pay are tautological and mask political power
• Marginal-productivity explanations of executive pay are tautological and misattribute organizational outcomes
• Marginal-productivity theory functions as claims-making discourse rather than wage science
• Most earnings inequality growth occurred within industries, not between them.
• Nearly 40% of S&P 500 earnings came from financial activities by 2000
• Nonfinance firms increasingly derived income from financial markets
• Nonfinance firms’ financial gains are funded by production-derived cash flows, not new productivity
• Nonfinance-firm financialization has received little research attention.
• Officers’ share of compensation captures the highest executive tier in corporations
• Prior research linked financialization to inequality mostly indirectly, not causally.
• Regional income convergence happened as Northern inequality rose to Southern levels
• Skill-biased technological change cannot explain cross-national variation in income inequality
• Stagnating growth plus deregulation pushed firms from production into financial investment
• Technology-driven explanations cannot explain cross-national inequality patterns.
• The college wage premium roughly doubled between the late 1970s and the 2000s.
• The marginal-productivity theory of wages is itself a discursive claim-making tool.
• Union decline concentrates income at the top
• Union decline raises officers’ relative compensation
• Union density raises both low-level wages and top executive compensation
• US inequality since 1970 grew mostly within rather than between industries
• Workforce demographics and market concentration shape income distribution independently
• Workplace claims-making power is shaped by race and gender status.