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Article here: Special Report - A lapse in concentration
Subtitle: A dearth of competition among firms helps explain wage inequality and a host of other ills
A Great Recession? What great recession? When? Where? Not for the salaried managers of BigBusiness! The Great Recession hurt mostly America's poor. For management, the Great Recession was just a blip in 2009/10, then onward and upward.
Excerpt:
Lesson to be learned? If you are a janitor, it is better to find a job sweeping the floors in a Telecoms company than Food Services employer.
Still, be careful. The steam has gone out of some key hi-tech companies. Fewer PCs are being sold, so Microsoft has strategically decided to invest in more up-market technologies (like cloud-management software). In fact, in America Telecom companies are doing very well indeed - but not because any real business acuity. There is not sufficient competition since market aggregation was allowed to occur, so lesser competition and higher price-fixing is the consequence.
From here, a world-wide perspective on data-pricing:
Subtitle: A dearth of competition among firms helps explain wage inequality and a host of other ills
A Great Recession? What great recession? When? Where? Not for the salaried managers of BigBusiness! The Great Recession hurt mostly America's poor. For management, the Great Recession was just a blip in 2009/10, then onward and upward.
Excerpt:
An intriguing line of research identifies an increase in the incidence of economic “rents” (profits over and above the levels needed to justify investment or input of work) as a possible villain. A study last year by Jason Furman, of the Council for Economic Advisers (CEA), and Peter Orszag, a former budget director for Barack Obama, found that the top 10% of firms by profit have pulled away sharply from the rest (see chart). Their return on capital invested rose from more than three times that of the median firm in the 1990s to eight times. This is way above any plausible cost of capital and likely to be pure rent. Those high returns are persistent. More than four-fifths of the firms that made a return of 25% or more in 2003 were still doing so ten years later.
Other research suggests that this increasingly skewed distribution of profits goes a long way to explaining the rise in wage inequality. A paper in 2014 by Erling Bath, Alex Bryson, James Davis and Richard Freeman found that most of the growing dispersion in individual pay since the 1970s is associated with variations in pay between companies, not within them. In other words, the most profitable companies pay handsomely and people who work for them earn more than the rest.
This finding was confirmed in a more recent study by Nicholas Bloom and David Price, both of Stanford University, with others, which found that virtually all of the rise in income inequality is explained by a growing dispersion in average wages paid by firms. This finding, the authors conclude, holds across all industries, regions and firm sizes. One of the most striking implications is that inequality within firms has not changed much: the relationship between managers’ and shop-floor workers’ pay in each firm is still roughly the same. But the gap between what the average and the best firms pay their workers at all levels has widened. Alan Krueger, of Princeton University, illustrated this point nicely at a presentation he gave while working at the CEA in 2013. Using data from the decade after 2003, he showed that where managers are well paid, so are janitors (see above chart).
Lesson to be learned? If you are a janitor, it is better to find a job sweeping the floors in a Telecoms company than Food Services employer.
Still, be careful. The steam has gone out of some key hi-tech companies. Fewer PCs are being sold, so Microsoft has strategically decided to invest in more up-market technologies (like cloud-management software). In fact, in America Telecom companies are doing very well indeed - but not because any real business acuity. There is not sufficient competition since market aggregation was allowed to occur, so lesser competition and higher price-fixing is the consequence.
From here, a world-wide perspective on data-pricing:
According to a new report released by the International Telecommunication Union (ITU) that measured the monthly cost of 500MB of pre-paid, mobile-broadband data, developed countries are the proud owners of the most affordable mobile-broadband in the world... sort of. While Austria comes in at a $4.70 per month, the mobile-broadband dark horse of the developed world, the United States, hits a staggering $85—but then, most of you were probably already well acquainted with that absurd truth. The ITU measured the monthly prices as a percentage of monthly gross national income, so the cause of the massive disparity comes down to the market itself.