WASHINGTON, D.C. - U.S. Senator Cory Booker (D-NJ) today raised concerns to the Department of Justice (DOJ) and the Federal Trade Commission (FTC) about the rising tide of corporate concentration and its impact on labor markets and wages.
In a letter to the Assistant Attorney General Makan Delrahim and Acting Chairman of the FTC Maureen K. Ohhausen, Booker warned about the growing trend in “monopsony” power – in which one or more companies (employers) become such dominant players in a region or sector that they have the power to limit worker mobility and depress wages.
While the FTC and DOJ have recognized that our antitrust protections apply to competition for employees just as they do to the sale of goods and services, their enforcement efforts and merger reviews in recent history have focused almost exclusively on the impact of market power on short-term consumer prices – often overlooking firms’ power over the price of labor, Booker said.
“It appears that – despite having a clear mandate to promote competition across the economy and extensive enforcement tools at your disposal…your Agencies have not prioritized the responsibility to ensure that workers have meaningful choices that allow them to fairly bargain among potential employers,” Booker wrote in the letter.
Booker continued: “A firm that has market power when purchasing inputs or hiring workers – an employer with monopsony power – will face strong incentives to employ fewer workers, at lower wages, than they would in a competitive labor market.”
Booker added: “…the rise of concentration across U.S. industries has helped create a labor market in which fewer workers are able to fairly bargain with their employers to set their wages on competitive terms.”
This trend, Booker said, is dangerous and a significant contributing factor to stagnating wages and rising inequality. Booker asked the agencies a series of questions about how they monitor threats to competition in labor markets and constraints they face in preventing firms from acquiring monopsony power.
Dating back to his days as tenant lawyer, City Council member, and Mayor of Newark, Booker has been a leading voice for economic justice and the fundamental promise that if you work hard in America, America should work for you. He has advocated for commonsense policies to increase wages, so that hard work is more fairly rewarded, and advanced proposals to crack down on hidden fees and other predatory practices by Wall Street and major corporations. He has also sought to expand investment in apprenticeship programs, infrastructure, startup accelerators, and domestic manufacturing, with a singular goal of fostering greater economic mobility and opportunity for all Americans.
Full text of the letter is here.