Antitrust Remedies for Labor Market Power

47 Pages Posted: 24 Feb 2018 Last revised: 3 May 2018

Suresh Naidu

Columbia University

Eric A. Posner

University of Chicago - Law School

E. Glen Weyl

Microsoft Research; Yale University

Date Written: February 23, 2018

Abstract

Recent research indicates that labor market power has contributed to wage inequality and economic stagnation. Although the antitrust laws prohibit firms from restricting competition in labor markets like in product markets, the government does little to address the labor market problem and private litigation has been rare and mostly unsuccessful. The reason is that the analytic methods for evaluating labor market power in antitrust contexts are primitive, far less sophisticated than the legal rules used to judge product market power. To remedy this asymmetry, we propose methods for judging the effects of mergers on labor markets. We also extend our approach to other forms of anticompetitive practices undertaken by employers against workers. We highlight some arguments and evidence indicating that market power may be even more important in labor than in product markets.

Keywords: monopsony, antitrust, merger analysis, matching

JEL Classification: D43, J42, L41, K21

Suggested Citation

Naidu, Suresh and Posner, Eric A. and Weyl, E. Glen, Antitrust Remedies for Labor Market Power (February 23, 2018). Harvard Law Review, Forthcoming; University of Chicago Coase-Sandor Institute for Law & Economics Research Paper No. 850; U of Chicago, Public Law Working Paper No. 665. Available at SSRN: https://ssrn.com/abstract=3129221 or http://dx.doi.org/10.2139/ssrn.3129221

Suresh Naidu

Columbia University ( email )

3022 Broadway
New York, NY 10027
United States

Eric A. Posner

University of Chicago - Law School ( email )

1111 E. 60th St.
Chicago, IL 60637
United States
773-702-0425 (Phone)
773-702-0730 (Fax)

HOME PAGE: http://www.law.uchicago.edu/faculty/posner-e/

Eric Glen Weyl (Contact Author)

Microsoft Research ( email )

One Memorial Drive
Cambridge, MA 02142
United States
(857) 998-4513 (Phone)

HOME PAGE: http://www.glenweyl.com

Yale University ( email )

28 Hillhouse Ave
New Haven, CT 06520-8268
United States

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