State intervention in primary distribution

The aim of this study is to argue the role of the state and its means of intervention in primary distribution and to challenge the confining of the state's role in economic distribution to redistribution since such a confinement means to discount the state's intervention in primary distribution as the founder and regulator of markets. For this purpose, first of all, the theories of distribution and wages of various schools of economics and their approaches to the role of the state in the economy are examined. Then, the historical development of state regulations in labor markets from the nineteenth century to the present day is discussed. Our main approach is that primary distribution is determined prior to relations of production, as a result of class conflict. The realm where the class conflict between labor and capital arises is the labor market, and the state intervenes in the formation and functioning of these markets with various regulations. In the study, the impact of these regulations on wage shares is investigated by regression analysis method using data of 34 OECD countries between 1990 and 2020 for manufacturing sector, and it is concluded that especially the level of minimum wage and minimum wage regulations in this context have a significant positive effect on wage shares. Another important finding is the negative effect of the reserve army on wage shares. These findings suggest that governments can implement effective and long-term distributional policies through pro-labor policies such as minimum wages and regulations and policies that protect workers against the threat of unemployment and expand employment opportunities.