The latter every time. It’s made much worse as it’s almost always achieved via a leveraged buy out, saddling the business with huge debt and absolving the vulture from most of the risk. It’s used as a one way ticket to stripping the company of any value.
A more mundane one, but people on reasonably normal incomes living in a house that’s at least one order of magnitude more expensive than they could ever afford even if they purchased it twenty or thirty years ago. Its particularly bad in things set in expensive areas like London or New York or Tokyo. Like being able to afford a house in central London rather than renting a flat with three other people takes substantial money, you aren’t going to be afford that if you work in a supermarket.