[Arn_Thor]

I was going to be glib and say "a thimbleful" but let's really look at it.

Firstly, pension funds hold some share of stocks, but far from all. Second, pension funds hold a share of a pie that's not all that came out of the bakery. The bakery made a lot more dough, but much pie was spent (horribly mixing metaphors) to buy assets like property and private investments. So in reality pension funds hold a fraction of a fraction. Third, pension funds invested in equity is a replacement for the old pension systems of yore where companies were forced to set aside money and invest smartly to fund guaranteed income pension plans. They don't have to do that anymore. Instead they contribute to a 401(K) or similar in other countries, which lowered their costs and reduced company risk. For listed companies, those savings went to the shareholders, of which pension funds were just a fraction of a fraction.

I hope this illustrates that we, the salaried workers, see only a small fraction of the value created by increased productivity.

[munksbeer]

No, it really doesn't. I think you're quite mistaken. Ultimately, most shares are held in funds which are pension or other personal wealth funds, and those are held by billions of ordinary people.

[Arn_Thor]

In the US, public and private pension funds directly hold about US$9.9trn of corporate equities, out of US$83trn of the publicly traded market (ignoring non-public wealth extraction which I also mentioned). That is about 12%. After allowing for pension exposure through mutual funds, we might be nearer to 20%. The Fed’s corporate-equity category also already includes ETF shares, so you can’t simply add “ETFs” on top without double-counting.

You've ignored the broader point about distribution. The Fed show that the top 1% own about half of corporate equities and mutual fund shares. So saying that shares are held by “billions of ordinary people” is quite wildly misleading.

My point wasn’t that ordinary workers own no shares through pensions or retirement accounts. But it is a limited and very unequally distributed channel for returning productivity gains to labor. It doesn’t make “shareholder profits” equivalent to “workers’ pensions.”

The key is that the wealth generated by workers makes its way into private pockets at many stages along the chain. Much of it never even makes its way to shareholders, neither through stock value increases nor dividends.

[munksbeer]

That is only pension funds. By far the largest indirect holds of US stock are households, via retirement accounts, mutual finds, ETFs, etc.

Yes, I agree, wealth inequality is massively skewed. But that is a different argument. In the end, if productivity increases and share prices go up, you and I are share holders (I presume you're saving for retirement), and we benefit. As does virtually every other person saving for retirement in the market.

Again, inequality is real, and is going to have to be addressed, but it is not the argument here.

[Arn_Thor]

Look, we are shareholders, but I showed how so much of the value generated by increased productivity never reaches listed companies, let alone their dividends. THAT is the key argument