Changing the Rules of the Game

In Chapter 2, I show that employer—employee relations changed over the last three and a half decades to the detriment of unions and labor in general. As a result, the counter balances to employers wage setting power decreased enabling business to drive a larger and larger wedge between the wage and marginal product of the average worker. The consequent increase in profits and the destruction of groups that would object to higher remuneration for those at the top made possible and probably explain the increase in CEO vis-à-vis workers’ compensation in the non-financial sector. Income inequality that exists from this dynamic is not only the result of different social worth but also the result of intra-firm power dynamics.