U.S. workers have been getting a shrinking share of the American economic pie, and economists have been puzzled by the decline. A new paper says one factor is the rise of “superstar” companies that dominate their market sectors and don’t need a lot of workers to generate profits.
“The aggregate share of labor falls as the weight of superstar firms in the economy grows,” the paper’s authors conclude. They are economists David Autor, Christina Patterson, and John Van Reenen of the Massachusetts Institute of Technology; Lawrence Katz of Harvard University; and David Dorn of the University of Zurich. The research was released in January as a working paper for the National Bureau of Economic Research.
The paper doesn’t name the superstars but notes that “firms may attain large market shares with a relatively small workforce, as illustrated by Facebook and Google.” READ MORE: https://www.bloomberg.com/news/articles/2017-02-03/-superstar-companies-are-eating-into-workers-wealth-study-finds