How are these two stories related? The first concerns a Nobel Prize winning economist’s proposition that the taxation and political structure of the United States plays a central role in the downward mobility of the American middle class, while the second concerns an investment fund that intends to purchase companies from their founders and eventually turn them over to their employees (in other words, presumably take the profits out of them for years while slowly transforming the companies into ESOPs). The relationship is that the second, if successful, is an example of using employee benefits in a manner that addresses the problem identified in the former.
ERISA and the employee benefit structure it governs are rife with opportunities to address the limitations on wealth accumulation among those born without it and who instead rely on the workplace to make their way in the world. Better employers already use it that way, and have long done so by such mechanisms as matching contributions and ESOP participation. But simple revisions could greatly expand the efficacy of ERISA plans as a means to address economic inequality and the problems it engenders by making simple changes that would increase the wealth of plan participants and beneficiaries.
ERISA plans and the benefits provided to workers under them are an open invitation to counter the long standing trend by which wealth has moved away from workers, as they can be used to move money and wealth in the opposition direction, in other words towards employees. All it would take is some thought about tax treatment, both of the benefit provided by the employer and of the benefit received by the employee, to provoke it. For instance, and here is a simple one, what if you changed the tax status of employee 401(k) contributions (and the earnings on them) from tax deferred to tax free? Short of reverting back to the long lost world where employees received pensions, it is hard to imagine anything that would more quickly increase the retirement wealth of workers.
If you like that one, I have a million more such ideas. Every time I run into something in my practice that increases the taxes, reduces the earnings or complicates the administration of benefit plans, I think of another thing you could change that would put more money into the bank accounts of employees by use of ERISA governed plans.