A Proposal to Enhance Antitrust Protection Against Labor Market Monopsony

23 Pages Posted: 28 Jan 2019

See all articles by Ioana Elena Marinescu

Ioana Elena Marinescu

University of Pennsylvania - School of Social Policy & Practice; National Bureau of Economic Research (NBER)

Eric A. Posner

University of Chicago - Law School

Date Written: December 21, 2018

Abstract

Recent empirical studies have revealed that labor market monopsony is far more common than previously thought, and that there is a strong correlation between wage suppression and labor market concentration. Yet few antitrust cases have been brought by workers against employers who exercise significant market power against them, and hardly any such cases have been successful. In contrast, antitrust cases against monopolists on the product market side are common. We argue that section 2 of the Sherman Act, which prohibits certain forms of monopolization (and has been interpreted to apply to labor market monopsonization as well) is insufficient for addressing monopsonization of labor markets because of structural differences between labor markets and product markets. We propose a new statute that would strengthen the law by giving employees a more robust claim against labor monopsonists who abuse their market power.

Keywords: antitrust, monopsony

JEL Classification: L1

Suggested Citation

Marinescu, Ioana Elena and Posner, Eric A., A Proposal to Enhance Antitrust Protection Against Labor Market Monopsony (December 21, 2018). Available at SSRN: https://ssrn.com/abstract=3317575 or http://dx.doi.org/10.2139/ssrn.3317575

Ioana Elena Marinescu

University of Pennsylvania - School of Social Policy & Practice ( email )

3701 Locust Walk
Philadelphia, PA 19104-6214
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Eric A. Posner (Contact Author)

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/

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