Let’s start with the obvious: We are experiencing the worst labor market since the Great Depression, if not ever. Since the COVID-19 crisis began, the employment-to-population ratio has cratered to a record low 51.3 percent, with nearly 43 million Americans unemployed or underemployed in April. That figure is likely to worsen in May, as about 4 million college graduates enter the job market.
Even amid the low headline-unemployment rates of the pre-pandemic economy, the scales of power in the labor market favored employers: Today, dual public health and economic threats have amplified that imbalance, particularly for low-wage employees who’ve been deemed “essential” and consigned to unsafe workplaces without hazard pay, paid sick leave, or childcare. With their lives and livelihoods at risk, many workers have never had less power.
Given the extent of corporate concentration in our economy, antitrust enforcement has gained new vigor as a means of increasing worker power through competition in the labor market. But as Roosevelt Fellow Suresh Naidu and the University of Chicago’s Eric A. Posner argue in a new report, much of employers’ power exceeds the reach of antitrust policy: Even in markets with many employers, free entry, and no collusion, those employers often choose high turnover and low retention in exchange for lower payroll.
Thus, equalizing the labor market, particularly during a pandemic, requires an antitrust-plus approach—not only constricting the power of large corporations through rigorous antitrust enforcement but also legislating and regulating the labor policies necessary for workers to feel empowered, even in small firms.
As Naidu and Posner explore, such interventions range in design and intent. Some reduce the wage-setting power of employers (e.g., allowing poaching or promoting unionization); some more directly constrain the choices of employers (e.g., raising the minimum wage); and others still shift employers’ incentives by bringing workers to the table (e.g., granting voting power or ownership shares).
All, however, speak to preexisting workplace inequalities that have only deepened since COVID-19 struck.
In this unprecedented crisis, workers have already demonstrated their strength. Now, they need power. And to build it, they’ll need the full force of antitrust and labor policy in their corner.