We got a reminder this week of how unequal the business world is: Apple became the first company to reach $1 trillion in market value. Four more tech companies are right behind it – the MAGAs. At the reverse side of this coin, many small, non-tech companies are going bust, and people working for them lose their jobs.
We know that as a consequence, income inequality is widening, with a few dozen billionaires owning more wealth as the poorest half of humanity. But we don’t always realize just how pervasive extreme inequality is in other parts of society. Yet it is as much a reality in the news, entertainment, sports industries and pretty much anywhere else. It’s time we recognize that, because what’s true for income inequality is true for any other kind of it: it’s not good.
My aha-moment came when reading an article on Beyoncé this week: she will feature on the cover of Vogue Magazine’s September issue. In itself that’s not remarkable: In the past few years, Jennifer Lawrence, Lady Gaga and Kate Moss got that same royal treatment. But Beyoncé is actually the first person to appear on the September issue cover twice (the first time was in 2015). It makes her somehow the star of the stars.
Is this out-of-this-world stardom really that exceptional? No. It’s just that we don’t fully grasp the scale and scope of it. We know the roots of economic inequality in industries. It led in recent years to a pushback against these “Big Tech”. But a similar effect is playing out in many other sectors. A few individuals, companies or organizations dominate their fields – any field - in a way not seen since, at least, the Gilded Age.
In the celebrity world, for example, according to Forbes, the top 100 global stars last year made more than $6.3 billion all together. That number was an increase of 22% compared to the year before, and more than half as much as it was a decade ago. (Beyoncé and Lady Gaga both topped the list in recent years, respectively in 2014 and 2011.)
The same is true in media, too. The Wall Street Journal, The New York Times and The Washington Post, who each once had a distinct local audience, tower above the other newspapers in terms of views, subscriptions and probably, ads and event revenues. The New York Times, for example, saw revenues for the first quarter this year go up 5%, to $399 million. Its online readership doubled the last two years, to a record 130 million a month.
While those performances are often well-deserved (and welcome!) for these individual media and entertainers, they should not conceal the other, dark side of the same equation: namely that at the bottom of the industry, the 50%, 90% or 99% are increasingly bearing the brunt. In entertainment, digital distribution and earning models make it hard, if not impossible, for many lower tier entertainers to stay on fans’ radars and make money.
Local newspapers, once the pride of America’s cities, have seen readers and advertising drop dramatically, leading to dozens of bankruptcies, and a fall of 45% in newsroom employment. The digital media and reporters that came in their place often work at salaries that are a fraction of what they once were, if they get a full-time contract at all.
It all points to the same conclusion: extreme inequality is everywhere, not just in tech or finance. I’ve even seen it play out in the organization I work. At the World Economic Forum Annual Meeting in Davos, Switzerland, a handful of celebrity government leaders and CEOs (think: Donald Trump, Xi Jinping, Justin Trudeau, Jack Ma, and Sheryl Sandberg, for example) go home with a majority of media mentions and attention. The 3,000 or so other participants, while often equally impressive, command much less attention.
It is a sign of the times, and a result of the Fourth Industrial Revolution we are living through. But ultimately, this type of extreme inequality is bad in whichever sector of the economy, or whichever part of society it plays out. The anxiety or antagonism, or sense of loss people at the bottom of the pyramid feel, is as real in media and entertainment, as it is in retail, or banking, or tech, or anywhere else.
Addressing and solving this issue is not an easy task. If anything, we are still going backwards than forwards. More often than not, when Oxfam, the U.S. Bureau of Labor Statistics, or other organizations release new numbers on economic inequality or wages, the news is not so great for the majority of the population. The same is true for inequality in other sectors: the big still get bigger, the small smaller.
But there is cause for optimism. For starters, we do know what works and what doesn’t, in addressing income inequality. Colleagues of mine who work on the topic of inclusive growth and development would summarize it as follows: a sole focus on GDP and growth doesn’t help. Expanding the focus to include metrics like employment rates, median incomes, poverty rates and the Gini-coefficient (measuring distance between richest and poorest) does help.
Perhaps similar measures could be included when industries and policymakers reflect on how to address extreme inequality in their field. Is there a way for Facebook to balance out the ranking of local media versus national ones in its algorithm, or for Spotify to pay a higher share of revenues for the first 10,000 plays of a song, than for the next 10 million? Can we find ways for extreme inequality in every domain to be balanced out by measures who favor the median, or those at the bottom?
The above are imperfect, and perhaps highly unrealistic solutions, to a big and growing problem. But it’s clear that the issue of extreme inequality needs to be addressed. And to really make a change, we mustn’t just look at the highest, most aggregate level of income inequality, but also sector by sector, and community by community.
