The US economy suffers from a market power problem that has invaded many sectors, including health care, telecommunications, and technology. As firms become more powerful, they are able to profit by taking advantage of other economic stakeholders rather than growing the overall economic pie. Competition as America once knew it—firms working to provide better goods
Public Comment to the Federal Trade Commission on the Preliminary Approval of the Staples-Essendant Merger
Roosevelt Research Associate Adil Abdela and Fellow Marshall Steinbaum submitted a public comment to the Federal Trade Commission (FTC), arguing against the preliminary approval of the Staples-Essendant merger. For more information on anticompetitive business practices see Powerless. For more information on a new standard for antitrust, see The Effective Competition Standard.
In partnership with the Economic Policy Institute, Roosevelt Research Associate Adil Abdela and Research Director and Fellow Marshall Steinbaum examine the impact of the proposed Sprint/T-Mobile merger on the labor market. Cutting the number of national players in the U.S. wireless industry from four to three, this move would escalate market power in the industry
One justification made by proponents of stock buybacks is that the practice is an effective way for funds to flow from companies that do not “need” the cash out to shareholders, who will then invest it in companies that are issuing new shares to finance firm activity. Does this explanation show up in the data?1
Since the 1970s, America’s antitrust policy regime has been weakening and market power has been on the rise. High market concentration—in which few firms compete in a given market—is one indicator of market power. From 1985 to 2017, the number of mergers completed annually rose from 2,308 to 15,361 (IMAA 2017). Recently, policymakers, academics, and
For a full analysis of why stock buybacks artificially boost share prices and reward shareholders and executives to the real detriment of workers and our economy at large, see Stock Buybacks: Driving a High-Profit, Low-Wage Economy. Monday’s bold speech by Robert Jackson Jr., Commissioner at the Securities and Exchange Commission (SEC), will hopefully mark the
Making the Case: How Ending Walmart’s Stock Buyback Program Would Help to Fix Our High-Profit, Low-Wage Economy
The rules that shape corporate America incentivize behavior that has led to the economic puzzle we see today: high corporate profits coupled with low and stagnant wages. “Shareholder primacy” is the practice in which corporations prioritize shareholder payouts over productive investment and employee compensation. This way of operating dominates corporate decision-making today, so employees have
Since the 1970s, America’s antitrust policy regime has been weakening and market power has been on the rise. High market concentration—in which fewer firms exist in a given market—is one troubling symptom and cause of market power. From 1985 to 2017, we saw an increase in the annual number of mergers from 2,308 to 15,361.