Declines in unionization and actions by employers to prevent workers from switching jobs have undermined competition in the U.S. labor market, driving down U.S. wages by 20%, the Treasury Department said Monday.
President Joe Biden has increasingly blamed corporate consolidation for driving up prices, and last year he signed an executive order aimed at increasing competition in the world’s biggest economy.
The Treasury report, stemming from Biden’s push, examines the impact of increased consolidation on workers.
“A competitive labor market is a key component of a well-functioning economy,” Treasury Secretary Janet Yellen said.
The Treasury said the study “finds that the US labor market is far from the perfect competition that economists have long assumed due to employer concentration and anti-competitive labor practices.”
This is a “significant problem”, and the report estimates that “lack of competition drives wages down by around 20% for workers, compared to what they would otherwise earn”.
The Treasury said increasing antitrust measures, making it easier to unionize and raising the minimum wage could improve competition.
Yellen said the administration “will work urgently to advance the recommendations set out in this report.”
The report specifically targets non-competition agreements, which restrict the industries in which an employee can work after leaving their job, as well as classifies them as subcontractors, which “have forced workers to accept lower wages and worst working conditions”.
He also cites “overly burdensome licensing requirements” as well as the falling ranks of unionized workers.
As US inflation rises at a rate not seen in four decades as the economy recovers from Covid-19, the Biden administration has increasingly sought to blame corporations for rising prices.
In November, the White House asked the Federal Trade Commission to determine whether oil companies were raising prices unnecessarily, and Biden called the meatpacking industry a “classic example” of too much power. walked in the hands of a few.
Biden supported raising the national minimum wage to $15 an hour, but the proposal went nowhere in Congress, where his Democratic lawmakers have narrow majorities in both houses.