What is a fair income distribution? The empirical literature seems to assume that equal income would be fair, but the equal income answer faces two objections. First, equal income is likely to be inefficient. This book sets aside efficiency concerns as a downstream consideration; it seeks to identify a fair distribution. The second objection—pointed out by both leftist political philosopher G. A. Cohen and conservative economist Milton Friedman—is that equal income is unfair to the hardworking. Measuring labor burdens in order to adjust income shares, however, is no easy task. Some philosophers and economists attempt to sidestep the measurement problem by invoking the envy test. Yet a distribution in which no one prefers someone else’s circumstances to her own, as the envy test requires, is unlikely to exist—and, even if it does exist, the normative connection between the envy test and fairness has not been established. The Solidarity Solution provides a novel answer: when someone claims that her situation should be improved at someone else’s expense, she must be able to give a reason that cannot be rejected by a free and equal individual who regards everyone else as the same. Part I develops the solidarity solution and shows that rigorous distributive implications can be derived from a relational ideal. Part II uses the solidarity solution to critique the competing theories of Ronald Dworkin, Philippe Van Parijs, and Marc Fleurbaey. Finally, part III identifies insights for the gender wage gap and taxation.
Do Male-Female Wage Differentials Reflect Differences in the Return to Skill? Cross-City Evidence from 1980–2000