Pay Inequality Boosted By Super Firms

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PAYYour economic destiny is more closely linked to your company’s than you might think.?

The wage divide has widened between workers at high-paying firms and those at low-paying companies over the past three decades, a trend consistent across U.S. regions and industries, new research shows. ?

That means that as top 1 percent wages skyrocketed between 1982 and 2012 — climbing 94 percent, compared with a 20 percent gain for workers at the middle of the income distribution — the divergence didn’t come from superstar chief executives increasingly out-earning their own employees. It came as some companies doled out larger paychecks across the board and others fell behind, the authors of a new working paper write.?

“There’s this view out there that the main reason inequality is rising is because of super managers,” Fatih Guvenen, a University of Minnesota economist who is among the paper’s four co-authors, said in an interview. “We’re arguing that it’s the rise of super firms.”

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