U.S. Steel. General Motors. AT&T. Exxon Mobil.Small potatoes.Apple on Thursday reached a milestone that these icons of capitalism never dreamed of: a market value of more than $1 trillion.That landmark is the result of an extraordinary corporate success story. In a span of just 21 years, a near-bankrupt computer maker evolved into the most valuable…
U.S. Steel. General Motors. AT&T. Exxon Mobil.
Apple on Thursday reached a milestone that these icons of capitalism never dreamed of: a market value of more than $1 trillion.
That landmark is the result of an extraordinary corporate success story. In a span of just 21 years, a near-bankrupt computer maker evolved into the most valuable publicly traded company in the United States, one whose innovative products have reshaped swaths of everyday life.
But Apple’s new 13-figure valuation also highlights how a group of enormous companies has come to dominate the United States economy. Today, a smaller cluster of American companies commands a larger share of total corporate profits than since at least the 1970s.
The impact of this phenomenon has been clear in the stock markets, where a band of household-name companies — led by Apple, Amazon, Facebook and Google — has fueled the nine-year bull market, the second-longest behind the rally that ended in 2000. Their successes also are propelling the broader economy, which is on track for its fastest growth rate in a decade.
linked corporate consolidation to rising income inequality and the declining share of the nation’s wealth that goes to workers. The so-called labor share of the economy has been declining in the United States and other rich countries since the 1990s, coinciding with the trend toward corporate concentration. And that decline has been most pronounced in industries undergoing the greatest consolidation.
less competition for workers and therefore little pressure to give raises to workers. That may be especially true in industries where skills are highly specialized, because it is harder for workers to look elsewhere for better pay. Recent research has highlighted examples of companies colluding to keep wages low by agreeing not to poach each other’s workers and by inserting provisions into workers’ contracts that bar them from joining competitors.
Some on the left take the critique a step further, arguing that greater corporate power translates into weaker antitrust enforcement, looser limits on campaign contributions and declining rates of unionization, which collectively make it easier for big companies to tilt the economy in their favor. Companies, in this view, are not just reaping bigger profits than they were in the past, but they are also feeling less pressure to share the spoils with workers.
was recently fined a record $5 billion by European antitrust regulators who accused the search giant of abusing its market position by forcing mobile phone companies to install Google apps on their phones.
Facebook is being forced by angry politicians and regulators to do more to safeguard users’ data and to prevent its platform from being used to interfere with American elections. Last week, Facebook reported that its growth was slowing and it was increasing spending on privacy and security. Its shares plunged 19 percent, lopping roughly $120 billion of the company’s market value in a single day.
And President Trump has repeatedly takenaim at Jeff Bezos, Amazon’s chief executive. Mr. Trump — who has expressed anger about coverage of his administration in The Washington Post, which Mr. Bezos bought in 2013 — has accused Amazon of not paying enough taxes and of taking advantage of the United States Postal Service. If Mr. Trump’s rhetoric translates into policy changes, it could hit Amazon’s bottom line.
Apple this week reported better-than-expected quarterly profit, setting the stage for its market value to top $1 trillion. But executives issued a cautionary note: The trade war with China — where Apple generates about 18 percent of its revenue — threatens the company’s ability to keep raking in profits at its current clip.
“A year ago, the big tech companies were basically untouchable,” said Luigi Zingales, a finance professor at the University of Chicago who has studied government regulation and corporate behavior. “Today, they seem not to be.”