The Harms of Monopolies on American Workers

By Zachary Brown

Antitrust law and its enforcement need a major overhaul. Mergers of large corporations across the country disastrously impacts our economy.  And while the broad economic effect of monopolistic rule often hogs all of the attention, we can’t forget the strong impact these corporate behemoths have on American workers.

In a hearing last month, the House Judiciary Committee took up this very problem. Multiple antitrust experts were called to testify. They illustrated that effective antitrust protections benefit workers. Just in case you missed it, here are a few quick hits from the hearing to keep you in the loop.

More Competition, More Worker Empowerment

Throughout the hearing, it was repeatedly shown that the lack of competition in the economic landscape damages conditions for workers. As markets become more concentrated, income and wages decrease, Brian Callaci, chief economist of the Open Markets Institute, testified. Additionally, labor market concentration also has a positive correlation with the amount of labor rights violations. Callaci went on to explain that monopsony power, in which there is one dominant buyer (employer) with many sellers (employees), leads to an unfair power balance that leaves workers at a distinct disadvantage. Put simply, if there’s an overwhelmingly powerful boss in town, they can set the salary to whatever they want without fear of competition.

During the hearing, we also heard about the effects of consolidation on workers from Daniel Gross, a delivery driver for United Parcel Service. Citing Amazon’s growth over the years, Gross explained that Amazon’s last mile delivery network especially harms workers because Amazon occupies an increasing percentage of the delivery market yet pays its workers less than UPS. Amazon’s unique power to link its online retail business to its delivery and logistics business puts other delivery services such as USPS, UPS, FedEx, and DHL at a clear disadvantage. This allows Amazons to unduly influence the market for labor conditions.

A Gap in Antitrust Law 

Speaking to the distinct impact that the enforcement of antitrust laws could have on the labor markets, Eric Posner, a professor from the University of Chicago Law School, detailed a “litigation gap” in antitrust law. While antitrust cases usually revolve around the harms done to other companies, very few decisions consider the effects that mergers and monopolies have on workers. Concerns about mergers leading to higher prices are usually central to the debate, while concerns about mergers’ effect on wages are often treated as an afterthought. But recent research shows that anticompetitive behaviors are just as prevalent in the labor market space as the product market space.

Posner explained that the Justice Department and the Federal Trade Commission have never challenged a merger because of its anticompetitive effects on labor markets, specifically. Workers deserve fair resources, wages, and conditions – encouraging and protecting competition between companies provides the everyday worker better options.

We can find some encouragement that both President Biden and Jonathan Kanter, Biden’s recent nominee to lead the Justice Department’s Antitrust Division, have expressed an understanding of market concentration’s impact on workers. But it is up to all of us to keep the pressure on our elected officials and government.

Revamping antitrust enforcement to address effects on labor would more equitably protect workers across the country.