10 Companies Quickly Taking Over America’s Wealth
What does Google have in common with Spanish conquistador Hernan Cortes? They’re both efficient. They are able to do a lot with little. Normally, we’d think of this type of efficiency as a good thing (in Cortes’ case, not really). But there are downsides to it. Specifically, when few people are able to accomplish so much — and, as a result, capture so much wealth — most people don’t get to enjoy the spoils. That’s not necessarily a bad thing, but it can exacerbate some issues, such as inequality.
Like Cortes conquering the Aztecs with a handful of men, America’s businesses are taking over the economy with trim, lean work forces. Just look at Facebook, for example. In all likelihood, just about everybody you know has a Facebook account. You might use it to log into your other accounts on other social media sites or to read the news. It’s everywhere. Inescapable.
And yet, the company has a handful of employees — less than 20,000. Compare that to America’s largest private employer, Wal-Mart, which employs 2.2 million. Turn back the clock 50 years, and it’s clear there’s a stark difference. Companies used to employ millions upon millions of people, all while capturing huge chunks of the market and creating enormous wealth. That wealth was shared among the large employee base.
Now, that wealth is being captured by companies that employ relatively few. That’s a recipe for increasing inequality.
‘Superstar’ companies and inequality
A new paper from the National Bureau of Economic Research shows these companies, all capturing huge shares of the market with small work forces, are contributing to rising levels of inequality. If fewer people are capturing bigger pieces of the pie, there’s less to go around. The paper calls these companies “superstar firms.”
The paper doesn’t name any companies specifically (except for a couple, noted on the following pages). But it isn’t too much of a stretch to find examples of these “superstar” firms. Here are 10 companies gobbling up immense amounts of wealth, possibly leading to further inequality. Your home probably has several products from the No. 8 company.
Facebook is one of a couple companies the paper mentions by name, as it is one of the hallmark examples of “firms may attain large market shares with a relatively small workforce.” And it’s true. Facebook is the dominant social media platform in the world today and has ingrained itself into almost every nook and cranny of our lives. It does so with a relatively small amount of manpower, too. As of the end of 2016, it employed roughly 17,000 people.
Amazon has come a long way from selling books out of a garage. These days, the company is turning retail upside down, experimenting with drone deliveries, stores with no staff, and producing its own technologies, such as Kindle and Echo. Its economic impact can’t be understated: 1 out of 2 American dollars spent online goes to Amazon. Yet, it employs a fairly small number of people. As of the beginning of 2017, its ranks still number less than 300,000.
Google (or its parent company, Alphabet) is the other company the study specifically points out by name. Like Facebook, Google is just about everywhere. Almost everyone uses Google’s search engine, email, or any number of other services on a daily basis. It’s hard to imagine life without it, at this point. And like the other companies, it has a relatively small number of employees. Currently, Alphabet employs more than 60,000.
A huge amount of our technical infrastructure is built on Microsoft platforms. We all grew up using Microsoft products, as well. We’re not just talking about Word and Excel — the Windows operating system was integral into the personal computing revolution. Although Microsoft has swollen to become a corporate power, its workforce still pales in comparison to some of America’s other large-scale employers. Worldwide, Microsoft employs roughly 120,000.
People absolutely love Apple. You can’t turn around without seeing someone on an iPhone. Apple develops and pushes out all of its shiny toys with a fairly small number of workers, too. The company directly employs about 75,000 people but claims it indirectly supports about 2 million jobs. With that small number of people, Apple has become one of the world’s most valuable companies.
6. JPMorgan Chase
After the financial meltdown in 2008, banks took a hit in the public psyche. It’s hard to say any bank these days is among America’s “favorite” companies, but the major players remain popular. Most Americans still use banks’ products and services in droves. These banks also hold massive market shares and earn billions upon billions per year. They do it with relatively few employees — more than tech companies, mind you, but a fairly small number. Current counts put JPMorgan Chase’s employee number at 240,000.
7. Wells Fargo
Like its competitor JPMorgan Chase, Wells Fargo has had to fight through some PR nightmares in recent years. Despite that the bank has been caught engaging in questionable behavior, millions of people remain loyal customers. It also employs a similar number of people as JPMorgan Chase. Recent employee counts put Wells Fargo ranks at about 270,000.
8. Johnson & Johnson
It’s not all technology and financial services. We all use general household and health care goods, too. Johnson & Johnson is one company everybody is familiar with, as our homes are often stocked with its products. The company makes tons of items, including medicines, eye drops, and Band-Aids. Yet, Johnson & Johnson directly employs fewer people than Microsoft. As of today, there are 127,000 Johnson & Johnson employees in 265 countries.
9. Exxon Mobil
Whether you like Exxon Mobil, the oil giant is a popular and well-recogizned name. In fact, it might be one of our most hated businesses. But it’s still integral to modern life. We need energy in all sorts of forms — be it to heat our homes, fuel our cars, and everything else. Exxon Mobil plays an important role in that respect. The company employs about 75,000 today, down from 90,000 or so in the early 2000s.
You probably don’t think about Visa very often, but like Google or Facebook, it’s everywhere. Odds are, there’s a Visa card in your wallet right now. Although you might not consider Visa to be among your favorite or popular companies, we all use the company’s products and services with high frequency. The company makes a huge amount of money, like others in the same industry, and only employs about 11,000.