Workers become wealthy thanks to 401(k)s, stock ownership plans and stock-option grants.
Socialism is in vogue again. Critics of capitalism call the market economy unfair, arguing that big corporations don’t pay low-income employees a living wage. They draw on studies showing that inequality has grown dramatically in both income and wealth. Their solution: a highly progressive income tax, or even a wealth tax, on the superrich, and a minimum wage of $20 an hour or more.
These economically destructive measures are unnecessary and would disrupt the positive changes happening in capital-labor relations. The private sector is quietly solving the inequality problem without more redistribution and wage controls.
How? Companies both large and small offer generous profit-sharing programs for employees—401(k) plans, stock options and discounted stock-purchase plans.