Solutions & Policy
What works to reduce inequality — education, redistribution, unions, and institutional reform.
What Actually Works?
Reducing inequality requires a multifaceted approach. No single policy is sufficient, but several have proven track records.
Education is often called the great equalizer, and universal access to quality education does reduce inequality over time. However, education alone cannot solve the problem — the US has high educational attainment and high inequality simultaneously. Education works best when combined with policies that ensure good jobs exist for graduates.
Progressive taxation and transfers are the most direct tools. The Scandinavian model combines high taxes with generous universal services — healthcare, education, childcare, elderly care — that compress the income distribution. Pre-tax inequality in Scandinavia is not dramatically different from the US; the difference is what happens after taxes and transfers.
Labor market institutions — minimum wages, collective bargaining, worker representation on boards — raise wages at the bottom and middle. Germany's introduction of a minimum wage in 2015 and the US Fight for $15 movement reflect growing recognition that market wages alone may be insufficient.
Wealth redistribution through inheritance taxes, land reform, and asset-building programs (like baby bonds) address the most persistent form of inequality — inherited advantage.