New US Treasury Report Says Corporate Concentration Limits Choices

A Biden administration report says collusion and other constraints on competition hold down pay and prospects in the labor market, reported New York Times. 

The recent narrative is that there is a tight labor market that gives workers leverage. But a new report from the Biden administration argues that the deck is still stacked against workers, reducing their ability to move from one employer to another and hurting their pay.

The report, released Monday by the Treasury Department, contends that employers often face little competition for their workers, allowing them to pay substantially less than they would otherwise.

“There is a recognition that the idea of a competitive labor market is a fiction,” said Ben Harris, assistant Treasury secretary in the office of economic policy, which prepared the report. “This is a sea change in economics.”

The report follows up on a promise made by President Biden last summer when he issued an executive order directing his administration to address excessive concentration in the market for work.

The Biden administration has come under fire in recent months due to real and perceived economic troubles that afflict the US economy as it recovers pre-COVID19 levels, with inflation and tight labor markets pressuring American consumers.