In much of the US, the mere mention of tax increases will prompt cries of “Socialism! Venezuela!” Meanwhile, in the UK: they are planning to just seize parts of companies for the workers.
All over the developed world, there is a long term trend of wealth accumulating at the very top of the income distributions. For decades, to varying degrees in the world’s wealthiest nations, the rich have been getting richer, and working people have mostly seen their incomes stay flat. All of the economic gains have been captured by a tiny class of high earners and investors. What to do?
In the UK, the Labour Party has an idea: Just make every big company give a chunk of itself to its employees. Voila! From the FT:
Every company with more than 250 staff would have to set up an “Inclusive Ownership Fund” owning 10 per cent of the equity. That would be built up gradually with management handing over 1 per cent a year for 10 years.
Workers would not be able to buy or sell the shares but would benefit from dividends paid out by the company, up to a maximum of £500 per worker. The IOF, run by a board of trustees made up of workers, would also have voting rights like other shareholders.
When you think about it, 10% is a very modest goal. This proposal is an example of just one form that the idea of forcibly transferring corporate wealth and influence into the pockets of the people can take. It accomplishes some of the same goals that social wealth funds and German work councils accomplish. We could leave the current, heavily unequal economic structure in place and then just tax the rich on the backside, but capturing equity for workers has the added benefit of aligning the interests of management and employees in a more genuine way. One drawback of this proposal is that it targets only publicly listed companies, but that could be fixed by expanding rather than cutting back on the idea.
You can quibble with the details but it’s nice to see a major party in power (EDIT: not yet!) in a major Western capitalist nation seriously proposing to give working people a portion of the companies they work for. Do that more.