An Antitrust Exemption for Workers: And Why Worker Bargaining Power Benefits Consumers, Too

Abstract

Based on economic analysis that indicates the moderate worker bargaining power when negotiating with employers leads to increases in downstream output and lower prices as well as increases in wages and employment, we propose legislation that establishes an antitrust exemption to permit the formation of voluntary worker associations that enable workers to engage in joint negotiation (i.e., collective bargaining) with employer firms that are likely to have “monopsony bargaining power,” that is, either “classical” monopsony power or a dominant degree of bargaining power. Members of the associations, which we call “joint negotiating entities” or “JNEs”, could include both those workers deemed to be “employees” under employment law and, in some situations, those regarded as independent contractors. For the purposes of the antitrust laws, each JNE would be treated as a single entity that is owned by its worker-members and generally subject to the same antitrust treatment as other single entities. The JNEs would be easier to form than unions, but JNEs would have fewer rights and less power than traditional unions and would thus be unlikely to become monopoly sellers of labor. While the proposed antitrust exemption and related worker protections would be limited, they nonetheless could lead to benefits for both workers and downstream consumers, whose interests would not conflict.

Keywords: Antitrust, Labor Economics, Monopsony, Trade Unions

JEL Classification: J42, J51, J59, K21, L43, L41, L12