How Big Businesses Impact Consumer Spending Habits

MIT’s David Autor, alongside Chicago Booth’s Christina Patterson and London School of Economics John Van Reenen, delves into the intricate dynamics of this corporate surge, unraveling its ramifications on both spending patterns and employment. As the corporate behemoths command an increasingly substantial share of the economy and consumer spending habits, the researchers scrutinize the dual narrative playing out on a national and grassroots level. Despite the concentration of economic activities in the hands of a few, a surprising contrast emerges when examining the employment landscape. The study unravels a complex restructuring of jobs, revealing that while these corporate giants accumulate jobs on a broader scale, the number of workers they employ at individual locations is diminishing. This Chicago Booth Review article emphasizes more on how big businesses impact consumer spending habits.

As the dominance of major US corporations continues to grow, influencing consumer spending habits both at a national and local level, research by MIT’s David Autor, Chicago Booth’s Christina Patterson, and London School of Economics’ John Van Reenen reveals a nuanced impact on employment. The study highlights a notable shift in national industrial concentration rates, rising sharply since 1980, reaching 90% for the top 1% of companies based on assets. However, despite the concentration of jobs within these corporate giants, the study observes a reduction in the number of workers per location.

A significant structural transformation is identified, marked by a transition from the highly concentrated manufacturing sector to the less concentrated services sector. Between 1992 and 2017, the US economy experienced a substantial move from manufacturing to services, impacting both sales and employment concentration. Notably, this shift has seen a decline in employment concentration, attributed to a decrease in factory employment and the rise of service jobs. The findings underscore the intricate interplay between economic activities, productivity, and consumer spending habits, urging policymakers to consider the multifaceted implications of this transformation.

In an era marked by the ascendancy of major US corporations, their influence extends not only over national economic landscapes but also profoundly shapes local consumer behavior. Read through the preceding text to learn more.