Employment and Wage Policies in a Post-Neoliberal World

Abstract

There is evidence-linking inequality to negative health outcomes and to a loss of trust in public institutions. Relevant causation runs both ways because institutional weakness makes it more difficult to redress persistent inequalities. In the period of dominance of neoliberal policies, the reduction of inequality was not pursued as a goal of public policy in its own right. This can, and should, be reversed by policies aimed explicitly at reducing wage and income inequalities. The legal framework should actively support sectoral collective bargaining, solidaristic forms of social insurance, and progressivity in taxation. Institutional reform is needed to create a virtuous circle of investment in public goods, confidence in the collective realm, and egalitarian outcomes. It remains to be seen whether the COVID-19 crisis can serve as a catalyst for the necessary structural break with neoliberal policies, but since those policies were weakening prior to the crisis, this is a possibility.