During most of the 20th century, companies bringing in the most money also employed the most people. This article looks at a new paper from the Brookings Institute about the new age of ghost companies.
1. The article mentions Walnart as one of the five largest companies in 2012 that had 100,000 people employed but more than 2.2 million people working for them. How is this possible? Explain.
2. List and discuss at least three reasons why this shift is bad for the middle class.
3. List and discuss at least three reasons why this shift is good for investors.
4. Do you see these costs and benefits being long-run or short-run trends? Why?
5. Why isn’t there more post-IPO job growth?
White, J. (2016). The Age of the Ghost Company. The Atlantic, Jan. 7 (Retrievable online at http://www.theatlantic.com/business/archive/2016/01/the-age-of-the-ghost-company/423138/)