Why are labor harms so rarely pled in antitrust cases? One factor may be the bias against low-wage labor markets in merger analysis. This bias treats the exact same employee behavior as rational in high-wage markets and irrational in low-wage markets. This article concludes with recommendations on how to better account for labor effects more generally in antitrust.
Blistering critiques of the last five decades of antitrust enforcement have led us to a debate, several years in, over whether and how to improve the current approach. A voluble part of the ongoing discussion has been whether antitrust, content for decades to rely on price and output effects, should take into account more than just the end price for consumers, such as the impact that consolidation would have on employees of the merging parties. Scholars and critics from this neo-Brandeisian school of thought have called for antitrust to generally better account for these types of labor effects.
The landmark antitrust labor case would be a merger case where the competitive harm is to the employees of the post-merger entity. Neither enforcement agency has ever brought one, but there are signs that the FTC may be searching for just such a case to bring. But there is a bias built in to how traditional antitrust economics distinguishes the characteristics of “skilled labor” and “unskilled labor” markets. Left uncorrected, enforcers m!-->…