Ten Steps Toward a More Competitive Labor Market
This piece was originally published by the Biden Forum.
There is no doubt that workers’ bargaining power is on the decline. Workers aren’t seeing the increase in wages that they’ve been waiting for since the end of the Great Recession. Notwithstanding historically low unemployment numbers, wages for American workers in “production and nonsupervisory” positions actually fell last year.
The causes of this trend are complex and multifaceted, but there is a growing consensus that one major culprit is a reduction in labor market competition. According to President Obama’s Council of Economic Advisers, “[s]uch a shift could explain not only the redistribution of revenues from worker wages to managerial earnings and profits, but also the rising disparity in pay among workers with similar skills.” When employers compete to attract and retain employees, workers have the leverage to bargain for better wages, working conditions, and treatment.
Vice President Biden and the Biden Forum are playing an important role in bringing the spotlight to these important issues. Vice President Biden’s call in his speech at the Kellogg School of Management this spring to do something about the “un-American un-competitiveness” of labor market constraints, like non-compete agreements, was an important step forward.
We need more concrete steps forward. In particular, we need a more multidisciplinary approach to solving these complex problems. When it comes to labor market competition, far too often, we still see only economists talking to economists or antitrust lawyers talking to antitrust lawyers.
To develop a multidisciplinary action plan, last month we invited to Harvard Law School participants across disciplines, backgrounds, and areas of expertise to catalyze collaboration towards the shared goal of increased labor market competition. Our convening included economists, antitrust lawyers, labor lawyers, advocates, activists, and federal and state enforcement officials from antitrust and labor branches of 11 different state attorneys general offices. We focused our discussion on how new and more robust collaborations could address these obstacles to competition.
The following are our recommendations:
Cultivate greater collaboration between labor and antitrust experts.
As is often the case, much of the success of our convening came from the conversations held in the hallway as well as in the conference room. Some of the most productive hallway conversations happened with officials from state attorneys general offices. Repeatedly we heard about the value of antitrust lawyers interacting with labor lawyers. Even though some of the participants worked for the same attorney general, they had never crossed their institutional silos to collaborate on cases. To foster more collaboration between labor and antitrust experts, we recommend:
- Creation of a coordinated network of state attorney general enforcement officials with expertise in labor and antitrust enforcement.
- Creation of a network within the private bar between antitrust and labor practitioners, advocates, and experts.
Increase accessibility of data and analysis.
Based on the discussion at our convening, our impression is that many economists are conducting valuable research but that their research isn’t necessarily finding its way to practitioners. To make data and analysis more accessible, we recommend:
- Creation of a database of labor market experts to help practitioners and advocates find relevant research.
- Compilation of examples of employment contracts to increase transparency of anti-competition provisions and allow practitioners and enforcement officials to better understand patterns in labor market contracts.
- More research on the relationship between the fissuring of work relationships and labor market competition.
Improve and coordinate messaging.
Too often the focus in discussions regarding the impact of mergers on competition, especially among antitrust enforcement officials, is on consumers. Too many people don’t understand that antitrust laws apply to the labor market and the connection between corporate concentration and wage stagnation. Moreover, the interests of consumers and workers often are posited as in opposition, instead of mutually reinforcing. To expand understanding of these issues, we recommend:
- Collaboration between academics, advocates, and practitioners on improving messaging and framing of labor market competition issues to be more accessible to the public.
- Development of strategic messages for state and federal policymakers that demonstrate how addressing anti-competitive corporate behavior and concentration serves the interests of both consumers and workers.
Create new tools for case identification.
The ultimate goal of our convening is to help bring more cases where needed, but lawyers can’t bring cases unless they pinpoint the problems. Our participants identified two obstacles to locating possibly meritorious cases: lack of knowledge by victims that their rights are being violated and victims’ fear of coming forward. To facilitate identification of cases, we recommend:
- Creation of a question intake guide to distribute to worker rights’ advocates to collect better data, inform workers of their rights, and identify potential cases.
- Development of training material for union, worker center, and legal services staff on antitrust issue spotting.
- Amendment of antitrust statutes to protect workers from retaliation to encourage potential plaintiffs to come forward.
From the Trump Administration’s recent stay on a rule to extend deserved overtime pay to millions of workers to the Supreme Court’s ruling against public-sector workers, workers are facing more and more obstacles to a fair and competitive labor market. But the fight for labor market competition doesn’t just happen within the White House or on the Supreme Court’s bench; advocates for workers’ rights are critical to ensuring workers are treated fairly and paid the wage they deserve. Here we’ve laid out ten concrete steps to help boost competition by giving advocates, lawyers, and economists the full set of tools they need. Unrigging the system isn’t easy, but if we all work together in a spirit of innovative commitment, workers may finally see the wage gains that have been elusive for far too long.