By Engelbert Stockhammer, Alexander Guschanski, & Karsten Köhler,

The past four decades were characterised by drastic changes in the distribution of income between wages and profits. This can be observed through a decline in the wage share. In a sample of 14 OECD countries, the share of total national income going to wages fell, on average, from 73% of national income in 1990 to 65% in 2011. This coincided with the phenomenon often dubbed ‘financialisation’. Financialisation comprises a range of phenomena including financial deregulation, securitisation, shareholder-value orientation, and increasing household debt. There is a vivid academic discussion on the causes and consequences of financialisation. Several studies show negative effects on investment (Tori and Onaran, 2015) and financial stability (Schularick and Taylor, 2012). But, while several authors have claimed that it also affected income distribution (Palley 2007), there is still limited systematic evidence for this…

Source: Evidence that financialisation increases income inequality

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