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Pay technicians like company owners
The hourly wage ceiling
Someone with a four-year degree, or a career in venture capital, software, banking, finance, or media, can climb. A factory worker gets an hourly wage. Private equity and venture capital have treated manufacturing experts and the workforce as second-class citizens for 40 years.
Equity for technicians
Hadrian gives everyone equity to a degree it doesn't have to, along with the same healthcare software engineers get. A technician with shares might get to buy a house, and as the company grows, they grow with it.
Where the wealth went
Over 40 years the wealth drained to the coasts and the middle of the country was hollowed out. Silicon Valley, the Pentagon, private equity, and private credit spend money building 100 billion dollar mega-cap companies. The wealth also has to reach the manufacturing experts putting their brains into the software and the technicians doing the work on the floor.
How did employee stock ownership spread?
Lawyer Louis Kelso designed the first employee stock ownership plan in the 1950s, arguing that workers should own capital as well as earn wages. Congress gave these plans a legal framework in the Employee Retirement Income Security Act of 1974. In an ESOP, a trust holds company shares on employees' behalf and distributes their value when they leave or retire. The National Center for Employee Ownership counts several thousand such companies in the United States.
Why did wealth cluster in coastal cities?
Economist Enrico Moretti described in The New Geography of Jobs (2012) how innovation industries cluster in a few metro areas. He estimated that each job in an innovation industry creates about five additional jobs in local services. Those hubs pull in talent and capital, which raises wages there further.
Why is a house the main way families build wealth?
A mortgage works as a form of forced saving, since each payment builds ownership in a house. The Federal Reserve's Survey of Consumer Finances has long shown that home equity is the largest asset for the typical middle-income household. The survey is conducted every three years.
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