A Planned Biden Order Aims to Tilt the Job Market Toward Workers

Ioana Marinescu, an economist at the University of Pennsylvania, analyzed data on 8,000 specific labor markets with two co-authors and found that when a job market was heavily concentrated among a few employers, it resulted in a 5 percent to 17 percent decline in wages.

But she said regulators tend to be wary of trying to block a merger on the grounds of its potential labor market impact because of a lack of legal precedent.

“Legally we’re on firm ground, but it may or may not be seen that way by some particular judge who has this on their desk,” Professor Marinescu said. “That creates a risk for the agency that doesn’t like the idea they might lose a case.”

She said that having pressure from the White House to pursue those legal theories would help, but that congressional legislation explicitly charging antitrust regulators with focusing on labor market conditions would help more.

There has been some bipartisan discussion on Capitol Hill about reining in noncompete agreements, particularly after the emergence of some outrage-stoking stories. (Sandwich shops and hair salons contractually barred workers from going to a competitor, for example.) These disputes tend to pit incumbent businesses — who don’t want their workers to be able to quit with potentially valuable information — against start-ups who want more ability to hire people at will.

Occupational licensing is also an area with potential for bipartisan agreement, uniting those who want more widespread labor market opportunity with those opposed to excessive regulation. Many more jobs require occupational licenses than in decades past, and typically a license in one state is not easily transferable to another, potentially limiting workers’ ability to move to places where they can earn more. This is particularly problematic for military families, who typically have no choice but to move regularly.

Still, there are potential negative effects with the Biden approach. By creating a barrier to entry for workers entering a field, licensing may also keep wages higher for existing workers in those jobs, meaning some people may stand to lose if requirements are revoked. Moreover, research by Peter Q. Blair of Harvard and Bobby Chung of the University of Illinois suggests that women and racial minorities experience less of a pay gap in fields that involve occupational licenses.

Article source: https://www.nytimes.com/2021/07/07/upshot/biden-executive-order-workers.html