The Profit Paradox: How Thriving Firms Threaten the Future of Work

A Brookings report from late December 2020 noted that Amazon and Walmart saw record profits during the COVID-19 pandemic, yet have done little to compensate their frontline workers. The new book from Eeckhout (social and behavioral science, Pompeu Fabra Univ., Barcelona) shows us why this shouldn’t be a surprise. Looking at the past 40 years of labor, he traces the growing distance between the economic potential created by new technology, and the stagnant wages for most workers. Eeckhout writes that the modern economic landscape resembles the early 20th-century second industrial revolution, but makes the wealth accumulation of the robber barons seem quaint in comparison to our modern tech entrepreneurs. His book is an exploration of the use of market power to push worker productivity to an all-time high without commensurate compensation. It mixes case studies and the author’s research to prove that the present economy is stacked against all workers, even those with advanced degrees, and that world governments haven’t done enough to regulate these near-monopolies. Readers of Binyamin Appelbaum’s The Economists’ Hour or Daniel Markovits’s The Meritocracy Trap will find a familiar story told through labor’s lens.