How to determine whether the skewing of income distribution against employees is a result of the functioning of the labour market or the functioning of the goods and services market: The example of the United States

A number of studies analysing the situation in the United States (see a few references in the Appendix) show that companies hold dominant positions in both the goods and services market and the labour market. Corporate concentration in goods and services markets is increasing (a smaller number of companies account for an increasing proportion of production in each sector), which leads to oligopoly rents; but corporate concentration in the labour market is also increasing (in each local labour market, a small number of companies account for an increasing share of hiring), which gives rise to a dominant position for companies that enables them to reduce wages. We can clearly see that income distribution is skewed against employees in the United States. But is this due to: The increase in profit margins resulting from companies’ dominant positions in the goods and services market; Or the squeezing of profit margins resulting from companies’ dominant positions in the labour market? We analyse wage formation econometrically in the United States; if its trend over time shows clear signs of a decline in wage-earners' bargaining power, then it is rather the functioning of the labour market that explains the skewing of income distribution against wage-earners; if this is not the case, then it is rather the functioning of the goods and services market. We see that the hypothesis according to which it is the increase in corporate concentration in goods and services markets that explains the skewing of income distribution in favour of companies and the increase in profit margins should apparently be favoured.