The term “redistribution” was often used critically in US political debate, yet the author argued that 2013 itself produced a major redistribution—upwards from working households towards people who owned substantial financial assets.
Market gains were unevenly shared
US share prices finished 2013 at record levels, producing their strongest annual advance in many years. The essay noted that these gains did not reach households equally because stock ownership was highly concentrated and many families had little capacity to save after meeting regular expenses.
Even when retirement accounts were included, the largest holdings remained concentrated among wealthy households. On that basis, the article characterised the bull market as a particularly large gain for those who already owned substantial portfolios.
One possible objection was that a rising market merely transferred money between investors who bought and sold at different times. The essay instead linked sustained equity values to corporate earnings. Although market prices and profits do not move together perfectly, profits were an important part of the 2013 story.
Profits, wages and bargaining power
The article argued that large US companies increased earnings less through domestic sales growth than through cost control, especially restraint on labour costs. Elevated unemployment and long spells out of work gave employers greater influence over pay and conditions.
Longer-running structural changes reinforced this imbalance. Companies had become more capable of moving work abroad, software was replacing a growing range of routine tasks, and employers increasingly used part-time or contract arrangements. Private-sector union membership had also fallen sharply from its mid-20th-century level.
In the author’s interpretation, these pressures helped corporate profits rise during the recovery while wage growth remained weak. The article cited contemporary reports describing profits as an unusually large share of economic output and labour compensation as an unusually small share.
Why public policy mattered
A purely market-based explanation would treat weaker wages, higher profits and rising share prices as outcomes of voluntary exchange. The essay rejected that distinction, arguing that public institutions establish the rules under which markets operate.
It pointed to reductions in federal and state spending, limited support for additional hiring and state labour laws that weakened unions. In this account, such decisions affected aggregate demand, employment conditions and workers’ ability to negotiate.
Tax policy was another part of the argument. Income from capital gains and dividends generally received different treatment from wages, while the treatment of debt and carried interest offered further advantages to some investors and financial managers. The result, the author contended, was an after-tax system more favourable to owners of wealth than to households dependent mainly on pay.
Reading this archive analysis today
The essay presents a distributional interpretation of one historical period. To assess its argument, readers should compare contemporary data on household wealth, labour compensation, union membership, corporate profits and effective tax rates, while noting that definitions and datasets may differ.
The article’s conclusion
The essay concluded that upward redistribution had been occurring for years but became particularly visible in 2013. At a time of high inequality and concern about economic mobility, gains associated with profits and rising asset values accrued mainly to households that already held wealth, while many workers experienced limited wage growth.
This remains a useful archive example of how economists and policy writers connect labour-market institutions, corporate earnings, asset ownership and taxation. It is best read as a clearly dated argument about distribution rather than a description of present-day conditions.