Noncompete clauses, licensing requirements and corporate mergers have tended to strengthen the hand of business.
By Neil Irwin
According to an increasingly influential school of thought in left-of-center economic circles, corporate mergers and some other common business practices have made American workers worse off. The government, this theory holds, should address it.
It appears that school has a particularly powerful student: President Biden.
This week, the White House is planning to release an executive order focused on competition policy. People familiar with the order say one section has several provisions aimed at increasing competition in the labor market.
The order will encourage the Federal Trade Commission to ban or limit noncompete agreements, which employers have increasingly used in recent years to try to hamper workers’ ability to quit for a better job. It encourages the F.T.C. to ban “unnecessary” occupational licensing restrictions, which can make finding new work harder, especially across state lines. And it encourages the F.T.C. and Justice Department to further restrict the ability of employers to share information on worker pay in ways that might amount to collusion.
More broadly, the executive order encourages antitrust regulators to consider how mergers might contribute to so-called monopsony — conditions in which workers have few choices of where to work and therefore lack leverage to negotiate higher wages or better benefits.
The order will depend on the ability of regulators to carry out the rules the White House seeks and to write them in ways that survive legal challenges. And many of the policies that labor economists see as problematic, including licensing requirements, are set at the state level, leaving a limited federal role.
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