Worker Welfare and Antitrust
33 Pages Posted: 25 Jan 2022 Last revised: 6 Dec 2022
Date Written: December 5, 2022
The field of antitrust and labor has gone through a profound change in orientation. For the great bulk of its history labor was viewed by antitrust enforcers as a competitive threat. The debate over antitrust and labor was framed around whether there should be a labor “immunity” from the antitrust laws. In just the last decade, however, the orientation has flipped. Most new writing views labor as a target of anticompetitive restraints imposed by employers. Antitrust is increasingly concerned with protecting labor rather than challenging its conduct.
Antitrust interest in labor markets is properly focused on two things. The smaller concern is the impact of anticompetitive restraints in the labor market, such as no-poaching agreements and noncompete covenants. While antitrust enforcement in this area is critically important, these restraints cover only a portion of the employment market. The bigger labor interest is in output reducing restraints in product markets, and here antitrust policy has unfortunately had little to contribute. The demand for labor is derivative of product market demand. If firms do not produce goods, workers do not work. Because most labor is a variable cost, the demand for employment varies with product output. As a result, when antitrust pursues a goal of higher output in product markets it is benefitting labor and consumers alike.
Both antitrust’s neoliberal right and its Progressive left have advocated policies that are harmful to labor. The right did so by developing a cynical vision of “consumer welfare” that incorporated producer profits into the definition and advocated for lower output in product markets. The left has done the same thing with its hostility to large firm size, even when dictated by scale economies or network effects, and its protection of small business.
Keywords: antitrust, legal history, employment law, labor economics
JEL Classification: J23, K21, L40
Suggested Citation: Suggested Citation