Reducing Wage Inequality

Abstract

This article concurs with Weiss’s critique of the myth of the powerless state, which underestimates the possibilities that remain open to nation states to take action. Even today in an environment characterized by globalized markets, nation states have at their disposal instruments that can effectively ensure high job quality. The Swedish and French examples show that the state, by means of various combinations of participative and protective labor standards, can ensure that there is a low share of low-wage workers and a high rate of coverage by collective agreements. Given sufficient political pressure, new standards, such as the minimum wage in Germany, can be put in place.