Why executive pay matters to innovation and inequality

doi:10.1017/CBO9780511794537.018

18 - Why executive pay matters to innovation and inequality

from Part IV - The transnational embedded firm and the financial crisis

Published online by Cambridge University Press: 07 September 2011

William Lazonick

Edited by

Cynthia A. Williams and

Peer Zumbansen

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Cynthia A. Williams: Affiliation:
University of Illinois, Chicago
Peer Zumbansen: Affiliation:
Osgoode Hall Law School, York University, Toronto

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Summary

Inequitable and unstable economic growth

The United States is the richest economy in the world. Yet in the 2000s the United States has been unable to deliver equitable and stable economic growth to its own population. The national unemployment rate, which was over 6 percent in the “jobless recovery” of 2003, exceeded 10 percent in the “jobless recovery” of 2009. Even the jobs of well-educated and experienced members of the labor force have been vulnerable to downsizing and offshoring. Given that the financial meltdown of 2008 has not resulted in significant government regulation, there is reason to believe that financial chaos will return in the not-too-distant future.

The distribution of income has become increasingly unequal over the past three decades, with a disappearance of middle-income jobs. As shown in Figure 18.1, in the last half of the 2000s, the share of total income going to the top 1 percent of households rose to well over 20 percent.

Type: Chapter
Information: The Embedded Firm
Corporate Governance, Labor, and Finance Capitalism
, pp. 413 - 439

DOI: https://doi.org/10.1017/CBO9780511794537.018 [Opens in a new window]

Publisher: Cambridge University Press

Print publication year: 2011

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