Firms and inequality

There have been some dramatic changes in the business landscape in American firms over the last four decades that have been extensively documented by researchers and are the subject of much public debate (e.g. Van Reenen, 2018; Akcigit and Ates, 2019). In broad terms, one could summarise many of these trends by saying that firm inequality has increased – companies are looking increasingly different in terms of their productivity, wages, markups and size. These changes have been accompanied by several worrying trends such as declining productivity growth, stagnating real wages (especially for low-educated workers), rising markups, a falling share of labour in GDP and declining business dynamism (e.g. the share of workers in young firms has declined).