Roosevelt Institute Economist Praises New Legislation Tackling the Excessive Power of Management in the Labor Market
Legislation Would Address the Ways Overly-Concentrated Labor Markets Harm Working People, Comes on Heels of New Roosevelt Institute Report on Market Power
NEW YORK, NY — This morning, Chair of the House Democratic Caucus Joe Crowley (D-NY), House Judiciary Committee Ranking Member Jerrold Nadler (D-NY), House Antitrust Caucus Co-Chairs David Cicilline (D-RI) and Keith Ellison (D-MN), and other leading members of the U.S. House of Representatives introduced a package of bills aimed at ending the harmful effects of overly concentrated labor markets and restoring power to workers.
Today’s bills come on the heels of the Roosevelt Institute’s release of a report and series of issue briefs detailing the ways monopsony and other market power harm the economy, including a specific brief on how market power harms workers. Overly concentrated labor markets give management excessive power over working people, resulting in stagnant wages, limited opportunities for career growth, and deepening inequality.
“I’m glad to see policymakers recognize the growing body of research establishing that labor markets are not competitive,” said Marshall Steinbaum, Fellow and Research Director at the Roosevelt Institute. “Instead, employers have power to dictate wages, working conditions, and terms of employment. Thus, rising corporate power—enabled by the lax antitrust enforcement of the last 40 years—is a significant contributor to the wage stagnation, lack of job opportunities, and weakening of labor protections we see in America today.”
“Congress should go further in requiring that labor market definition and analysis be incorporated in both antitrust merger review and in the enforcement of antitrust restrictions on dominant firms and their conduct,” Steinbaum said. “Regulators have incorrectly applied a narrow consumer welfare standard and adhered to the faulty the assumption that labor markets are competitive. This has blinded them to the harm corporate consolidation does to workers. “
“It’s great to see progressive policymakers offering new proposals to rewrite the rules of our high-profit, low-wage economy, and these bills are another example of this important shift,” said Steph Sterling, Vice President of Advocacy and Policy at the Roosevelt Institute. “It’s encouraging that these House leaders are hearing—and acting—on voters’ demands for real, structural changes to our economy.”
A recent survey conducted by Lake Research Partners of voters in 30 congressional districts found that 52% preferred “a bold and comprehensive agenda to rewrite the rules of the economy,” compared with just 36% of voters who would choose to “make our economy work for everyone by building on the success of the past.” And a 2017 survey by Hart Research Associates found that, by 2-to-1 (67% to 33%), Americans believe it is a bigger problem that “huge corporations and billionaires are using their political power to reduce competition, keep wages low, and get special tax breaks” than that “government is imposing too many job-killing regulations on businesses and taxing people too much.”
The negative impact of concentrated markets has long been a top research and policy priority for the Roosevelt Institute. Most recently, the Roosevelt Institute released the report, Powerless: How Lax Antitrust Enforcement and Concentrated Market Power Rig the Economy Against American Workers, Consumers, and Communities. This report examines the ways that market power distorts the U.S. economy and limits available policy solutions. The report was accompanied by a series of issue briefs that looked at the ways market power contributes to bad economic outcomes for communities of color, working people, and the small business sector. In December, Marshall Steinbaum released the report “Labor Market Concentration,” which was featured in outlets, including The New York Times and Bloomberg.
About the Roosevelt Institute
Until the rules work for every American, they’re not working. The Roosevelt Institute asks: what does a better society look like? Armed with a bold vision for the future, we push the economic and social debate forward. We believe that those at the top hold too much power and wealth, and that our economy will be stronger when that changes. Ultimately, we want our work to move the country toward a new economic and political system: one built by many for the good of all.
It takes all of us to rewrite the rules. From emerging leaders to Nobel laureate economists, we’ve built a network of thousands. At Roosevelt, we make influencers more thoughtful and thinkers more influential. We also celebrate –and are inspired by– those whose work embodies the values of both Franklin and Eleanor Roosevelt and carries their vision forward today.