We Are The 1%
Bloomberg Businessweek|May 13, 2019

In the winner-take-all world of Big Business, the rich companies are getting richer and the poor poorer

Peter Coy
We Are The 1%

Liberals have a blind spot about inequality. They decry disparity between individuals—the fact, for example, that the 10 richest people in America have more money than the bottom 160 million. But they overlook inequality among companies, instead viewing Big Business as a troublesome monolith. During the 2016 presidential campaign, Senator Bernie Sanders of Vermont occasionally tarred business with a broad brush, once saying the chiefs of large multinational companies “ain’t going to like me.”

The surprising truth is there’s as much inequality among large companies as there is among people. As with individuals, a handful of companies make the lion’s share of profits, while struggling companies do so poorly they actually destroy value for their shareholders and debtholders. In the middle is a stressed-out majority: unable to keep up with the best, while pressured by the desperate tactics of the worst.

Inequality in the corporate world isn’t new. Perfect competition—with millions of small, roughly equal businesses battling it out on a level playing field—was never more than a teaching device in intro economics textbooks. What’s new, though, is that the polarization is increasing. The rich businesses are getting richer and the poor poorer.

A 2018 study from McKinsey Global Institute analyzes 5,750 companies around the world that have $1 billion or more in annual revenue and account for roughly two-thirds of all global pretax profits. The institute—the think tank of the global consulting firm McKinsey & Co.—calculates that the best-performing 10th of the companies captured about 80 percent of all the economic profit in 2014 through 2016, up from 75 percent a decade earlier. The top 1 percent of the companies captured 36 percent.

This story is from the {{IssueName}} edition of {{MagazineName}}.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

This story is from the {{IssueName}} edition of {{MagazineName}}.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

MORE STORIES FROM BLOOMBERG BUSINESSWEEKView all
Instagram's Founders Say It's Time for a New Social App
Bloomberg Businessweek US

Instagram's Founders Say It's Time for a New Social App

The rise of AI and the fall of Twitter could create opportunities for upstarts

time-read
4 mins  |
March 13, 2023
Running in Circles
Bloomberg Businessweek US

Running in Circles

A subscription running shoe program aims to fight footwear waste

time-read
3 mins  |
March 20 - 27, 2023
What I Learned Working at a Hawaiien Mega-Resort
Bloomberg Businessweek US

What I Learned Working at a Hawaiien Mega-Resort

Nine wild secrets from the staff at Turtle Bay, who have to manage everyone from haughty honeymooners to go-go-dancing golfers.

time-read
10 mins  |
March 20 - 27, 2023
How Noma Will Blossom In Kyoto
Bloomberg Businessweek US

How Noma Will Blossom In Kyoto

The best restaurant in the world just began its second pop-up in Japan. Here's what's cooking

time-read
3 mins  |
March 20 - 27, 2023
The Last-Mover Problem
Bloomberg Businessweek US

The Last-Mover Problem

A startup called Sennder is trying to bring an extremely tech-resistant industry into the age of apps

time-read
10+ mins  |
March 20 - 27, 2023
Tick Tock, TikTok
Bloomberg Businessweek US

Tick Tock, TikTok

The US thinks the Chinese-owned social media app is a major national security risk. TikTok is running out of ways to avoid a ban

time-read
10+ mins  |
March 20 - 27, 2023
Cleaner Clothing Dye, Made From Bacteria
Bloomberg Businessweek US

Cleaner Clothing Dye, Made From Bacteria

A UK company produces colors with less water than conventional methods and no toxic chemicals

time-read
3 mins  |
March 20 - 27, 2023
Pumping Heat in Hamburg
Bloomberg Businessweek US

Pumping Heat in Hamburg

The German port city plans to store hot water underground and bring it up to heat homes in the winter

time-read
3 mins  |
March 20 - 27, 2023
Sustainability: Calamari's Climate Edge
Bloomberg Businessweek US

Sustainability: Calamari's Climate Edge

Squid's ability to flourish in warmer waters makes it fitting for a diet for the changing environment

time-read
4 mins  |
March 20 - 27, 2023
New Money, New Problems
Bloomberg Businessweek US

New Money, New Problems

In Naples, an influx of wealthy is displacing out-of-towners lower-income workers

time-read
4 mins  |
March 20 - 27, 2023