ABSTRACT
The concern of policy intervention is to redress those outcomes of the operation of the price mechanism for which society, through its chosen representatives, is seeking remediation. Even in an economy which is as wealthy as the United States, income inequality is a matter of considerable concern because it is associated not only with poverty, but also with crime and social unrest. The question whether income disparities can or should be addressed by policy intervention is a controversial question about which a consensus is unlikely in the foreseeable future. The developmental processes that are at the root of income inequality are not as yet fully understood. 1 Nevertheless, it is very clear that the effects of the processes involved operate through an economy’s labor markets. An examination of the wage share and its functional distribution is thus a logical preliminary to addressing unsatisfactory labor market outcomes as policy issues.
