What Germany's got that America doesn't

The World
Former Secretary of Labor Robert Reich's new book is called Saving Capitalism: For the Many, Not the Few

Income inequality is front and center in the the race for the Democratic presidential nomination, thanks to Sen. Bernie Sanders. 

And the widening income gap between workers and managers isn't a uniquely American problem, it's global.

But several capitalist economies in northern Europe have done much more than the US has to close the income gap, according to Robert Reich, the former secretary of labor and the author of a new book, Saving Captialism: For the Many, Not the Few

"Among developed countries, the United States has the most unequal distribution of income and of wealth," he says. "People at the top are doing superbly well in this recovery, better than ever."

Reich points to Germany as a nation with a more egalitarian distribution of income. He says the top one percent of workers in Germany take home roughly 11 percent of the country's total income.  In contrast, those "one percenters" in the US earn about 20 percent of national income. Plus, those German workers can expect their government to provide some measure of health care and education.  It's a similar situation in Denmark, Sweden and Norway, he adds.

Reich, a professor at the University of California Berkeley, says stronger unions are a fundamental reason why some northern European nations have been able to bolster wages for their middle classes. US workers enjoyed the same benefits in the mid-1950s, when about one out three American workers was unionized. 

"That gave the vast middle class a voice and considerable bargaining leverage because if you weren't unionized, you were still going to be affected by the union contracts," Reich says. "An employer in a non-unionized sector knew that if he or she didn't go along with unionized bargaining then that employer would be the next to be unionized."

And in Germany, unions' power, according to Reich is structurally integrated into corporate goverance. 

"Unions do have a say in what corporations do in terms of pay and many things that in the United States are prerogatives of management," he notes. 

Saving Capitalism: For the Many, Not the Few (Chapter 1)

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