U.S. Labor Market Concentration, Competition, and Worker Bargaining Power as Employment Trends Shift From Manufacturing to Services
By: Laura Alexander (Washington Center for Equitable Growth)
Labor market concentration and competition in the United States have garnered renewed and well-deserved attention in recent years. Competitive labor markets are fundamental drivers of economic growth, worker well-being, and equality. Similar to the concentration seen in sales data, it is extensively documented that levels of concentration in the U.S. labor sector have been increasing at the national level.
A newly released working paper titled “Local and National Concentration Trends in Jobs and Sales: The Role of Structural Transformation” reaffirms these nationwide trends. The paper’s co-authors—David Autor at the Massachusetts Institute of Technology, Christina Patterson at the University of Chicago, and John Van Reenan at the London School of Economics—confirm a notable rise in concentration levels across all sectors, including manufacturing, retail trade, wholesale trade, services, utilities and transportation, and finance, both individually and collectively.
According to their calculations, sales concentration, assessed through a weighted average of the Herfindahl-Hirschman Index (HHI), a commonly used measure for market concentration, has surged by 53 percent, and employment concentration has increased by 68 percent in 2017, compared to figures from 1992. To provide perspective, a market transitioning from five companies of equal size to only three companies of equal size would experience a 63 percent increase in its HHI.
Furthermore, the paper delves into local concentration trends in job markets and sales, investigating whether these trends align with the national trajectory. These local trends are arguably more significant from a competition standpoint, as individuals generally prefer to shop and work in proximity to their residence, making competition in local markets highly relevant to their day-to-day lives and livelihoods…
Featured News
Nvidia and Microsoft Sued for Allegedly Undercutting AI Technology Patent Prices
Sep 5, 2024 by
CPI
White & Case Strengthens Antitrust and M&A Practices with New Partner Additions
Sep 5, 2024 by
CPI
Federal Judge Dismisses Antitrust Lawyers’ Fee Demand Over JetBlue-Spirit Deal
Sep 5, 2024 by
CPI
Boston Landlords Named as US Sues RealPage Over Alleged Rent-Inflating Practices
Sep 5, 2024 by
CPI
Judge to Weigh Landmark NCAA Settlement Proposal in Antitrust Lawsuit
Sep 5, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Canada & Mexico
Sep 3, 2024 by
CPI
Competitive Convergence: Mexico’s 30-Year Quest for Antitrust Parity with its Northern Neighbor
Sep 3, 2024 by
CPI
Competition and Digital Markets in North America: A Comparative Study of Antitrust Investigations in Mexico and the United States
Sep 3, 2024 by
CPI
Recent Antitrust Development in Mexico: COFECE’s Preliminary Report on Amazon and Mercado Libre
Sep 3, 2024 by
CPI
The Cost of Making COFECE Disappear
Sep 3, 2024 by
CPI