Mergers

2021 ◽  
pp. 76-90
Author(s):  
Eric A. Posner
Keyword(s):  
Labor Market ◽  
Labor Markets ◽  
Market Power ◽  
Wage Inequality ◽  
Legal Rules ◽  
Market Effects ◽  
Antitrust Laws ◽  
Economic Stagnation ◽  
The Government ◽  
Private Litigation

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 as in product markets, the government does little to address the labor market problem, and private litigation has been rare and mostly unsuccessful. This is a particular problem for mergers, which the government has never reviewed for labor market effects. One reason is that the analytic methods for evaluating labor market power in antitrust contexts are less sophisticated than the legal rules used to judge product market power. To remedy this asymmetry, the government can draw on insights from labor economics and use tools that have been developed for measuring labor market concentration.

Collusion

2021 ◽  
pp. 45-60
Author(s):  
Eric A. Posner
Keyword(s):  
Labor Market ◽  
Labor Markets ◽  
Common Law ◽  
Product Market ◽  
Antitrust Laws ◽  
Exchange Information ◽  
Covenants Not To Compete

Employers collude in labor markets in a variety of ways. They fix wages, agree not to poach each other’s workers, and exchange information. They also collude with employees by entering covenants not to compete. All of these actions are anticompetitive and they often violate the antitrust laws, but it is difficult for workers to challenge them in court, and few cases have been successful. When workers challenge covenants not to compete, courts defer to the relatively lax common law standard, under which employers do not pay penalties. And strict antitrust standards developed to address product market cases doom labor market cases, where collusion is both easier for employers and easier to hide from authorities. Regulators and courts should be more attentive to the peculiarities of labor markets and more open to antitrust actions.

Dual Labor Markets Revisited

2020 ◽  
Author(s):  
Samuel Bentolila ◽  
Juan J. Dolado ◽  
Juan F. Jimeno
Keyword(s):  
Labor Market ◽  
Labor Markets ◽  
Employment Protection ◽  
Theoretical Research ◽  
Market Effects ◽  
The Great Recession ◽  
Reform Strategies ◽  
Dual Labor Markets ◽  
Dead End ◽  
Protection Legislation

This article provides an overview of empirical and theoretical research on dual labor markets. It revisits the labor-market effects of dual employment protection legislation as well as the main factors behind its resilience. Characterized by a high incidence of temporary contracts, which may lead to stepping-stone or dead-end jobs, dual labor markets exhibit specific features regarding the determination of employment, unemployment, churn, training, productivity growth, wages, and labor market flows. Relying on the contrasting experiences of several OECD countries with different degrees of duality and, in particular, on the very poor employment performance of some EU countries during the Great Recession, lessons are drawn about policy-reform strategies aiming to correct the inefficiencies of dual labor markets.

scholarly journals The Labor Market: An Overview from an Islamic Perspective

2019 ◽  
Vol 3 (1) ◽  
pp. 24
Author(s):  
Hanifiyah Yuliatul Hijriah ◽  
Elfira Maya Adiba
Keyword(s):  
Labor Market ◽  
Market Power ◽  
Wage Rate ◽  
Wage Labor ◽  
Demand And Supply ◽  
Islamic Perspective ◽  
Library Research ◽  
The Government ◽  
Extent Of Absorption

The concept of employment has some aspects that are integrated in order to achieve the balance of the workforce, both aspects of demand and supply of labor. The labor market is considered as the location of meeting between the demand for labor from both the private and Government sectors and the supply of labor available. The meeting of demand and supply of manpower can exert influence on the determination of the level of wage labor. In other words, the labor market plays a role in assisting the Government in the process of making employment-related policies such as the determination of the level of wages. This study, by employing library research, demonstrated that the concept of labor as seen from the viewpoint of Islam will be able to reach the concept of labor. It is not limited to the extent of absorption of labor, but also related how the level of the workforce that is capable of being managed by the Government to be more productive. The policy of wage rate in Islam is not limited to referring to balance demand and supply of labor. It also reviews the needs of a worker based on the principle of fairness and honesty, and protects both interests in the worker and the employer. The essence of Islamic economy in review market power based on the view of Islam shows its potential in generating equitable economy society and realize prosperity.

Labor Monopsony in the United States

2021 ◽  
pp. 11-29
Author(s):  
Eric A. Posner
Keyword(s):  
United States ◽  
Economic Growth ◽  
Labor Market ◽  
Labor Markets ◽  
Market Power ◽  
Empirical Work ◽  
The United States ◽  
Market Concentration ◽  
Wide Range ◽  
Low Wages

Most labor markets are monopsonistic, meaning that employers have market power and can suppress wages below the competitive rate. Among the various sources of market power is concentration: the usually small number of employers who compete to offer a type of job to workers. At one time, economists assumed that labor markets were competitive, and largely ignored the phenomenon of labor market concentration. Recent empirical work, relying on newly available databases, has established that labor market concentration is a serious problem in the United States and may account for a wide range of pathologies, including low wages, inequality, and stagnant economic growth.

scholarly journals Labor Market Segmentation and Immigrant Competition: A Quantal Response Statistical Equilibrium Analysis

Entropy ◽  
2020 ◽  
Vol 22 (7) ◽  
pp. 742 ◽  
Author(s):  
Noé M. Wiener
Keyword(s):  
Labor Market ◽  
Labor Markets ◽  
Wage Inequality ◽  
Market Competition ◽  
Maximum Entropy Principle ◽  
The United States ◽  
Statistical Equilibrium ◽  
Equilibrium Analysis ◽  
Foreign Born ◽  
Quantal Response

Competition between and within groups of workers takes place in labor markets that are segmented along various, often unobservable dimensions. This paper proposes a measure of the intensity of competition in labor markets on the basis of limited data. The maximum entropy principle is used to make inferences about the unobserved mobility decisions of workers in US household data. The quantal response statistical equilibrium class of models can be seen to give robust microfoundations to the persistent patterns of wage inequality. An application to labor market competition between native and foreign-born workers in the United States shows that this class of models captures a substantial proportion of the informational content of observed wage distributions.

Measuring Labor Market Power Two Ways

2019 ◽  
Vol 109 ◽  
pp. 317-321 ◽  
Author(s):  
José Azar ◽  
Ioana Marinescu ◽  
Marshall Steinbaum
Keyword(s):  
Labor Market ◽  
Labor Supply ◽  
Labor Markets ◽  
Market Power ◽  
Negative Relationship ◽  
Firm Level ◽  
Supply Elasticity ◽  
Labor Supply Elasticity ◽  
Monopsony Power

We compute the “applications elasticity” as a proxy for firm-level labor supply elasticity by regressing the applications to a given job on the posted wage. The average applications elasticity in our data is 0.42. We then relate our elasticity estimates to concentration in labor markets defined by six-digit SOC occupations and commuting zone. We show a robust negative relationship between the two. Applications elasticity is near zero for all but the most densely populated labor markets, suggesting that 80 percent of the workforce works in labor markets where employers exercise significant monopsony power.

scholarly journals The China Syndrome: Local Labor Market Effects of Import Competition in the United States

2013 ◽  
Vol 103 (6) ◽  
pp. 2121-2168 ◽  
Author(s):  
David H Autor ◽  
David Dorn ◽  
Gordon H Hanson
Keyword(s):  
United States ◽  
Labor Market ◽  
Labor Markets ◽  
Labor Force Participation ◽  
The United States ◽  
Manufacturing Industries ◽  
Import Competition ◽  
Local Labor Markets ◽  
Industry Specialization ◽  
Market Effects

We analyze the effect of rising Chinese import competition between 1990 and 2007 on US local labor markets, exploiting cross-market variation in import exposure stemming from initial differences in industry specialization and instrumenting for US imports using changes in Chinese imports by other high-income countries. Rising imports cause higher unemployment, lower labor force participation, and reduced wages in local labor markets that house import-competing manufacturing industries. In our main specification, import competition explains one-quarter of the contemporaneous aggregate decline in US manufacturing employment. Transfer benefits payments for unemployment, disability, retirement, and healthcare also rise sharply in more trade-exposed labor markets. (JEL E24, F14, F16, J23, J31, L60, O47, R12, R23)

Common Ownership and the Corporate Governance Channel for Employer Power in Labor Markets

2021 ◽  
Vol 66 (1) ◽  
pp. 123-139
Author(s):  
Marshall Steinbaum
Keyword(s):  
Corporate Governance ◽  
Labor Market ◽  
Labor Markets ◽  
Market Power ◽  
Profit Maximization ◽  
Balance Of Power ◽  
Consumer Welfare ◽  
Firm Level ◽  
Common Ownership

This article combines two relatively new subjects of antitrust scholarly interest: labor market power and corporate governance. In so doing, it speaks to a number of recent debates that have grown up both inside the scholarly antitrust literature and adjacent to it. First, this article interprets the shift in the balance of power within corporations favoring shareholders at the expense of workers, both in economic-theoretical and historical terms. Second, it lays out the role of shareholders and the common ownership channel as a vector for anticompetitive conduct arising between firms, not just within firms, thanks to profit maximization at the portfolio level rather than the firm level. Third, it evaluates the claim that employer market power has increased, relative to other current explanations for labor market trends. Fourth, it ties rising employer power in labor markets to the increasing significance of common ownership. And finally, it contends that antitrust is a suitable policy remedy to the dual problems of anticompetitive common ownership and increased employer power, provided it abandons the consumer welfare standard and instead elevates worker welfare to an equivalent juridical status.

Monopsony

2021 ◽  
pp. 61-75
Author(s):  
Eric A. Posner
Keyword(s):  
Labor Market ◽  
Labor Markets ◽  
Antitrust Laws ◽  
Difficult Position ◽  
Do So

In many labor markets, only one or a small number of employers offer jobs to workers. In these markets, employers maximize profits by suppressing wages, and likely do so. Yet antitrust litigation against labor monopsonists is extremely rare and almost never successful. The paucity of cases has left workers with possible claims in a difficult position; in the absence of developed law, lawyers are reluctant to take cases. Congress should reform the antitrust laws to strengthen the legal tools available to workers who seek to challenge wage suppression by monopsonists. A first step is for Congress (or regulators) to offer guidelines to help courts understand how a labor market is defined, and what sorts of conduct should be regarded as anticompetitive.

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