America is often referred to as the land of opportunity and it’s a sentiment that many U.S. citizens hold. If you work hard enough and long enough you can pull yourself up the class ladder and make a better life for yourself and your family. However, the trend over the last couple of decades, especially after the recession, has been increasing wage disparity and less competition in markets.
Wage disparity in and of itself is not an issue; it is expected to a degree in any economy. The people who work more, work in dangerous jobs, are highly skilled, or have critical positions in companies are rewarded more than positions that lack those criteria. The issue lies in that the lowest income brackets have been barely growing to match inflation, while the top income bracket has seen almost all of the growth over the last decade. This means that the overall buying power of these positions has decreased over time. As this issue persists it can lead to the working poor; people who work full time, but still can’t afford a basic standard of living. With their time dedicated to a full-time job there is little anyone in a position like this can do to pull themselves out of it.
Along with the slow decay of buying power, many goods and services in America have been getting more expensive due to other market forces like lack of competition. Competition in markets has seen a steep downturn after the recession due to many companies failing and being bought up by larger ones. This is good in the sense that unsuccessful businesses become a part of more successful ones, but in many markets, it leaves a near monopoly. Just four airline companies control over eighty percent of the U.S. market, only one company controls most of the eyeglasses market, and just 10 companies control nearly the entire food market. The list goes on and on. Money spent on corporate buyouts and mergers has also started to outpace actual growth of new businesses. With large companies getting even bigger it makes it even harder for small businesses to start up and succeed in the marketplace. It can allow them to outcompete others or simply force them out of business through shady dealings.
For example, Luxottica, which owns most of the eyeglasses market as well as many eye clinics, was competing with Oakley glasses. Rather than outcompete them they dropped Oakley from all of their clinics and stores; the stock price of Oakley plummeted and Luxottica acquired them easily. That is the future that will be more likely for small businesses in America as this trend continues. And if nothing is done about it soon we may begin to see more products go the way that EpiPen did when Martin Shkreli raised its price over five thousand percent since his company had no competition.
We need sensible legislation that is focused on increasing competition, decreasing the likelihood of strong-arm tactics like what was used against Oakley, and growing the bottom portions of our economy to at least keep up with inflation.
