Rising Profits Don’t Lift Workers’ Boats

Capital ▶ As industries consolidate, they prosper but shut out employees ▶ It’s “one of the transcendent issues confronting the U.S.”

Big business is getting bigger, and workers’ slice of the economic pie is getting smaller. Those trends have bred resentment toward large corporations. Now research shows a surprisingly tight link between the two phenomena: The share of the pie that goes to workers has been shrinking most in precisely those industries where ownership is becoming more concentrated.

Increasing industry concentration “may explain one of the transcendent issues confronting the U.S. economy,” namely labor’s declining share and profits’ rising share of the value a company creates, Michael Feroli, the chief U.S. economist at Jpmorgan Chase, wrote in an April 25 research note. In an interview four days later, Feroli said that while the finding needs closer analysis, “I haven’t had anyone say, ‘You’re