1、 itif.org Corporate Concentration Is Good for Productivity and Wages TRELYSA LONG|MAY 2024 Despite claims by anticorporate neo-Brandeisians,corporate concentration appears positively correlated with higher productivity and wages.So,the push to break up large companies is antiworker and anti-middle c

2、lass.KEY TAKEAWAYS Contrary to the prevailing anticorporate narrative,concentration rose only about 1 percentage point from 34.3 percent in 2002 to 35.3 percent in 2017and the industries that were most concentrated in 2002 became less concentrated by 2017.In the same period,the most recent Census da

3、ta available shows there was a positive correlation(0.29)between change in productivity and change wages:Industries that became more concentrated over time also became more productive.The more concentrated an industry was in 2002,the higher its productivity growth from 2002 to 2017a correlation of 0

4、.25.Industries that were more concentrated in 2002 also saw higher increases in hourly compensation from 2002 to 2017a correlation of 0.23.Given the fact that bigger firms on average tend to spur higher productivity and wages,policymakers should recognize that the current campaign to break up large

5、firms is counterproductive.The Justice Department and Federal Trade Commission should modify the 2023 Merger Guidelines to be more favorable to mergers,especially those that result in minimal price increases but significant productivity gains.INFORMATION TECHNOLOGY&INNOVATION FOUNDATION|MAY 2024 PAG

6、E 2 CONTENTS Key Takeaways.1 Introduction.2 Rebutting The Argument That Concentration Hurts Productivity and Wages.5 Concentration and Labor Productivity.8 Concentration and Labor Compensation.12 Implications and Policy Recommendations.18 Conclusion.20 Endnotes.21 INTRODUCTION In recent years,a grow