When a Company Dominates Its Market, Do Employees Benefit?

In most U.S. industries, the biggest firms have a higher market share than they did three decades ago. One study found that 75% of U.S. industries have become more concentrated since the 1990s and that the average size of the largest players in the economy has tripled. A potential concern with this rise in industry concentration is that it reduces workers’ employment options, and thus gives employers the ability to lower wages. However, research also suggests that when firms make outsize profits — as they might when they have a large share of the market — they share some of it with workers in the form of higher wages.

Which of these effects is more significant? My research suggests it depends on the industry and the type of work.

Like this content? Why not share it?
Share on FacebookTweet about this on TwitterGoogle+Share on LinkedInBuffer this pagePin on PinterestShare on Redditshare on TumblrShare on StumbleUpon

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.