$17,262 in company-owned hotels compared with $15,558 in franchisees as franchisees employ a far smaller share of full-time workers.Differences in earnings extend to workers employed by subcontractors. The warehouse and logistics industry has been reshaped by the emergence of third-party logistics firms (3PLs). There are now sharp differences in pay and working conditions depending on whether workers are on the payroll of the firms whose goods are being stored, transferred, and shipped or are employees of the 3PLs. The 3PLs con-tract with temp agencies for workers to staff warehouses as “pickers” who find objects that have been ordered and who unpack, repack, load, and ship goods to their destinations and with independent con-tractors for trucking services. They encourage truck drivers and temp firms to compete for contracts, placing continuous downward pressure on pay (Ruckelshaus, Smith, Leberstein, and Cho 2014).Financial actors, though not depicted in the figure, have been active players in the hotel indus-try. Private equity firms have acquired hotels and resorts and profited from financial engineering; examples include Blackstone Group’s takeover of Hilton, Apollo Management and TPG’s buyout of Harrah’s Entertainment, now Caesar’s Entertainment, and the checkered history of Extended Stay’s serial takeovers by PE firms. Real estate investment trusts acquire hotel properties in Figure 3.Combination of Contractual Patterns [Adapted from Barenberg 2015].Source: Bernhardt et al. (2016).
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Appelbaum 525sale-lease back deals that typically involve shareholder payouts. Strategic Hotels & Resorts owns iconic properties as well as hotels belonging to major chains (Ajmera 2015).5. ConclusionThe structure of firms has undergone a major evolution over the past thirty-plus decades as verti-cally integrated companies have focused on core competencies and outsourced many tasks. The increase in production networks and differences in the ability of lead and contractor firms to extract jointly produced value—rents and profit—contributes prominently to rising inequality in earnings among establishments and firms. This, in turn, is a major source of differences across employers in the pay of workers with similar skills and characteristics.Declaration of Conflicting InterestsThe author declared no potential conflicts of interest with respect to the research, authorship, and/or publi-cation of this article.FundingThe author received no financial support for the research, authorship, and/or publication of this article.ReferencesAjmera, Ankit. 2015. Blackstone to buy strategic hotels in $6 billion deal. Reuters, September 8. -N0R81GQ20150908.Appelbaum, Eileen. 2012. No happy ending for friendly’s. Huffington Post, January 21. tonpost.com/eileen-appelbaum/no-happy-ending-for-frien_b_1105278.html.
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