Corporations contribute to wage stagnation through several mechanisms, primarily by leveraging market power. Monopoly and monopsony structures are significant drivers, with monopoly power accounting for approximately 75 percent of wage stagnation in 2016. This concentration of market power allows companies to decouple productivity gains from worker pay.
Furthermore, the dependence of publicly traded companies on large buyers reduces supplier wages, contributing about 10 percent of wage stagnation between 1978 and 2014. These dynamics are often the result of policy choices that favor high income individuals and entities with significant wealth and power. As a result, while productivity continues to rise, worker salaries fail to keep pace with the increasing cost of living.
