Labor-market institutions matter: inequality, wage policy, and worker well-being

This chapter argues that money manager capitalism in the United States, which has resulted in greater income inequality and erosion of the middle class, has contributed much to the political polarization of recent years. It also argues the consequences of that capitalism have necessitated strengthening labor market institutions and coordinating the public and private sectors in ways that increase economic opportunity and protect working families. The chapter presents data showing the consequences of money manager capitalism are more visible in "blue" states than "red" states, making blue-state residents generally more open to pro-worker public policy reforms than red-state residents. Blue-state residents may have experienced a greater increase in economic insecurity in recent decades, but red-state residents may be experiencing greater economic anxiety. The task ahead is to craft and build support for policy changes that could unify red and blue voters by shoring up the middle class and improving worker well-being.