 Good morning, everybody. Folks, take a seat. There's still plenty of seats up in the middle here. Come on through and sit down. Thanks for coming out this morning. And welcome to the Economic Policy Institute. I am Thea Lee, president of EPI. We are delighted to co-host this event this morning with the Open Markets Institute, another organization that has done amazing work looking at monopoly and the role of monopoly and product markets, market power and product markets in the economy. And we feel like these two organizations coming together today to talk about the role of monopoly power in labor markets really brings together some great work on both sides of that market, about the role of corporate concentration in the American economy. So for more than 30 years, EPI has been exposing the role of employer power and its impact on the living standards of working people and their families. And from its origins a couple of years ago, the Open Markets Institute has been on the leading edge of exposing the role of monopoly power in the American economy. And the research that we've been doing recently has revealed that these are really two sides of the same coin. And that is what this convening is all about. This morning, we're going to discuss market concentration, its effect on labor markets, and what the appropriate policy responses are. And we have a fantastic lineup today, beginning with a keynote and conversation with Commissioner Rohit Chopra from the Federal Trade Commission and moving on to a panel discussion moderated by Lydia DePillis from CNN. But without further ado, I will introduce Sarah Miller, Deputy Director of OMI, to lead the conversation with Commissioner Chopra. Good morning. We are so excited to be hosting this event with EPI. And we are so appreciative of all the work that they did with us to make this event possible. We also want to extend our thanks to Commissioner Rohit Chopra, who's joining us today to talk about these issues. We're thrilled to see them kind of coming together this morning in conversation. As many of you know, Commissioner Chopra was appointed to the commission back in May. He has a long history and long record of being an advocate for consumers and has really been on the forefront of research, policy development, and action on student debt crisis starting back in 2012 and even before that. And really being on the leading edge of those issues when he was standing up the CFPB, leading their student loan work as student ombudsman, student loan ombudsman, and then as a advisor at the Department of Education. He has really taken a leadership role at the FTC, and we've been excited to watch what he's been doing. So as many of you know, if you go onto the FTC's website, their slogan, their motto is protecting consumers, right? And that is what they do, a big part of what they do. But if you look back at the FTC Act, you see that the first part of the statute says that they have a responsibility to prevent unfair methods of competition and deceptive acts affecting commerce. And Commissioner Chopra is really breathing new life into that part of the FTC's mandate in important ways. He has called for resuming rulemaking and antitrust, particularly in regards to non-compete agreements. It's an interesting thing that I know is of interest to a lot of people in this room and in this conversation. And he has also brought in questions around equity and enforcement. The Federal Trade Commission has often gone after smaller players and has let the bigger violators maybe get away with a slap on the wrist. So we've been really excited to watch what the commission is doing and are thrilled to have Commissioner Chopra here with us today. Just one last note to share something that I think we should all keep in mind during the course of this conversation. I was reading through some of your statements last night. One point really jumped out at me, which is you wrote or said, safeguarding the competitive process is a prerequisite for prosperity. And that's something that we really believe. And again, it's a reason why I think we're so thrilled to see these conversations around concentration, market concentration, and worker power, and the labor market coming together. So just a process note, we're going to ask, I'm going to talk to Commissioner Chopra for a little bit, ask her a few questions, and then we're going to take questions from the audience and have a conversation. Sound good? Yeah, just the talk. All right. Great. Thank you. Well, I just want to say thanks to EPI, who's been such a source of a different perspective on the way that many economists look at the world. And I think EPI has also looked at individual workers and citizens and human beings and their experience rather than just looking at stock market values and asset prices. And I think that is a huge contribution, so I'm so happy to be here. Great. Well, thank you so much. So should we just jump right into it? Please, please. OK. So first big question, right? How does concentration in your view affect the job market? Big picture. What are the signs that you see that the job market lacks competition? And how should we kind of go forward thinking about that? Yeah, so something that I think should really gnaw and bug all of us is when we look back for the last 30, 40 years, we see that American workers' productivity has consistently gone up, but their wages essentially have not really gone up in real terms. And the chart is just so it's distressing because you see a total divergence starting in about the late 70s, early 80s. And so the questions are, why is it if labor is producing more, why aren't they capturing more? So a lot of economists try and debate all sorts of reasons why this is happening. But sometimes we don't think about the answer that might be so obvious in front of us, which is that there are fewer choices and fewer options. And those two things together mean lower wages. It means that someone feels they have to take a job because there's no other options. And all these ideas that we're going to pay people what they're worth, when we live in a world where we want to maximize margins to juice our stock price, obviously you want that margin to be as big as possible. So here's what we sometimes forget. We look at big picture averages. But if we look especially in our small towns and cities, our less densely populated areas, we see really pernicious effects of concentration. Of course, we don't know exact causation. But intuitively, the fewer opportunities there are in much of America not only means lower wages, but it means a lousier work experience. So it's not just about the paycheck. It's also about how people's job quality is. The more that they can be controlled or surveilled by their employers, people wouldn't choose that if they had more options. And I think concentration is likely a contributor to that. And I think we need to wake up more to better understand that link, because it's what we should be pushing for if we want an economy that works. That's great. So would you say that the Federal Trade Commission is too focused on consumer prices and its competition analysis? And how should or should job market effects factor into those decisions? Yeah, so look, obviously, consumer prices are things we should think about and want to think about. But they can't be the only thing we think about. We have to be thinking about all other sorts of factors, innovation, choices, and frankly, the balance of bargaining power in any commercial transaction, or frankly, any job market transaction. So look, maybe the FTC is too focused partially because you focus on what is easiest to measure. And that can be the bias of a lot of economic analysis. You look for what you can put a number to. But I think that's where we have to be much more rigorous. I mean, one of my goals for the FTC is to dramatically increase the analytical rigor that we use to solve these problems. Because if we are looking at other issues besides this one data point, we will get to better answers. Right. I mean, I think that's been something that Open Markets has been focused on, too, in terms of concentration data. And we just released a report a few weeks ago that pulled some private data to give some numbers to the general sense that concentration in the economy is in extreme levels and has risen over time. So I think that's a really important point that you have to, that what you measure is a political decision, and what you measure is important for how you shape policy to respond to specific problems. And that's exactly what the FTC is supposed to do. There's an authority under, some of you may know, Section 6B to conduct industry-wide data collections. Sarah, you know the FTC conducted the Lines of Business Survey to learn exactly what is happening in the economy so that the decisions are not shooting from the hip. And I think we need to rethink, are we not collecting the information we need to make evidence-based decisions? Or are we simply going along with what the lawyers and establishment economists say is right? Great. I think that's a really important point to mention, and it's a good audience in terms of economists who are interested in data and where that's a critical part of what people need to be able to do important research is found. So you've also raised concerns about wage fixing to get into a more specific topic. What is the FTC doing wrong in your view, and how do you think we should fix it? Well, let me just say that I think we under-appreciate that the fewer market players there are, the more concentration there is, the easier it is to coordinate on prices and wages. Sometimes you can announce to your investors that you are planning to hold the line on wages. There's many ways you can signal where your wages are moving. And it can become easy to coordinate. And sometimes, of course, it's more pernicious, where it's a backroom discussion. These are very, very difficult to detect. And I have raised some concerns what we recently identified, health care staffing agencies in the home health care work space, coordinating on wages to suppress them. And the commission's proposed answer to that was essentially a pardon, no money, no notice, no admission of facts, no liability. And my concern about that is if there's such blatant violations of law and we're saying, don't do it again, that just sends a signal that it is worth it to do this. And that really worries me. So I think part of how we have to do this, and I have former FTC commissioner Josh Wright, others, a very different part of how they view anti-trust law. But even he advocates, we need to get bans on individuals. We need to go after the individuals who broke that law rather than just telling the company to stop. So individual accountability, findings of liability, and really signal to the market that we know this is hard to detect. But when we find it, there will be consequences. And that's what I'm worried about is that settlements with no consequences are green lights for crime. I am not an economist, but one of the terms that I learned in the last couple of years when looking at this was equilibrium collusion, which when you look at how these market places have been reduced into two, three, four really dominant players, kind of maximizing power in the market, even when there might not be ill intent, forces, economic forces, kind of push towards these kind of equilibrium collusion that need to be really taken seriously and unpacked and understood. So I think that's really interesting to focus on. What about to kind of talk about another issue that's really top of mind in the conversation? How is the FTC and how are you looking at the differences, the discrepancies, the challenges around independent contractors and traditional employees? How are we, what should we be thinking about from the FTC's perspective in terms of how those markets are functioning and what we should be doing to provide protections in terms of those two different classifications of workers? Well, we should just fundamentally, in our hearts and minds, know that independent contractors and employees, they are both people and they are not different coded inside. But it is very easy for an employer with a lot of market power to start sitting an independent contractor next to one of their employees and scare them. And we see this. Look, our traditional employees, the whole history of the antitrust laws and commercial regulation was to make sure that we are policing the imbalance of power between big companies and people. 100 years ago, the FTC really attacked this in the meat packing industry. And Congress passed laws making sure that farmers and producers could cooperate. Obviously, workers have the ability to unionize. But independent contractors, I think big employers know this. They're not allowed to cooperate the same way. And in fact, the FTC actually took some actions against associations of organists and ice skating teachers, the menaces to society that I think gave the impression to many people that as the FTC out to get these independent contractors, workers, and I don't think that was the intent, but it is a reminder that the worker misclassification is a trend in our economy that we need to, I think, deploy a number of tools to fix because I think some elements of this can be pretty pernicious. And I think the bottom line there is when you have excessive market power, you can push your way around. And if there were more choices, people would choose stable work with benefits over being on their own. Another question. I have just a few more, and I want to let others ask questions if you always still have a little bit of your time. So this is an easy one. Should companies be allowed to take away workers' rights? I mean, I think there's, well, so no. And I think here's where, but here's where I think it gets really, I hate hearing about someone at their first day on the job. They've quit their old job. They've accepted a new one. And they have to sign reams and reams of paper saying that they can't join a competitor for a year afterward, that they can't disparage the, they can't tell the truth about their work experience. They're responsible for damages, not the employer. They agree to all these things. And I think I get worried that some people think, well, it's a contract. They negotiated it. And look, we all know much of our commercial transactions and work, these are take it or leave it form contracts. And a couple years ago in 2016, there was almost unanimity in the Congress. They banned some of these clauses in consumer form contracts. There is actually a law against saying you are prevented from giving truthful reviews about a consumer product. I think there's a good question. Why isn't that true for, why isn't these form contracts, are there all these ways to layer in? And look, the reason why it happens is because there's a lot of market power because people are not able to have that negotiation. And they sign things that, it's not about that they don't know what they're signing. It's that they just feel they have to sign whatever's put in front of them. So we wrote, as you mentioned, a paper that we contributed to the formal docket of the FTC hearings asking questions about should we be using antitrust rulemaking and how there are real limitations of doing case by case enforcement. Sometimes it can just tempt enforcers to strong arms, small guys, and let the big guys off the hook. But rulemaking can be much more transparent, much more participatory. And I think we raised the question that if private litigants aren't able to exercise their rights because they've signed away through forced arbitration, whatever it might be, should public enforcers and regulators start saying, well, there are all these anti-competitive practices. And maybe we need to think about doing it through participatory rulemaking rather than just one bite at the apple at the time. So we've raised that question. We've got a lot of feedback about it. And I think there is an intense amount of interest in how we can use those tools to help workers and increase job competition. Great. So I want to ask one more question, which is a personal favorite of mine. We at Open Markets do a lot of work on technology companies. And I'm sure a lot of you also saw the article in The New York Times a few days ago on location tracking and kind of how all of your location data, which can easily be kind of de-anonymized, is available for a price. And I wanted to ask Commissioner Chopra if he or the FTC has concerns about surveillance more generally and how that plays into your thinking about protecting workers and protecting competition. Yeah, well, obviously, we are in some ways far farther behind the national security establishment and others who are deeply worried about mass collection of data over citizens. But in the workplace, I was just looking at the jobs numbers earlier this month. And we see one of the big categories of job growth is warehouse workers. And warehouse workers, XPO, Amazon, whatever the logistics companies may be, we read about how many have to carry little devices that track all of their movements and it maybe feeds into an algorithm to determine if they should be fired. And I think the mass collection of data over people, whether it's with or without their consent, raises very significant not just antitrust competition issues, but some civil and human rights issues too. So I'm not sure how confident the public is that the Congress understands this issue. So we all need to do work to make sure that they really can clearly see how people's data can be used against them. And that's going to be a big priority to fix. Yeah, great. And yeah, it seems like a big lift right now when you're kind of looking at Congress. Yeah, but we have to look. These are, if we compare to a generation ago, 100 years ago, these firms are the highest valuation firms on the planet. And you hear some automotive companies saying, we're going to get huge amounts of our revenue from data. More and more companies are acting like data companies because they see once they can grab that, boy, can they squeeze it. And there's a lot of implications to that. All right, thanks so much. I want to open it up for questions from the audience. Who's first? There we go in the back. If you could just state your name and affiliation. I'm Larry Michele with the Economic Policy Institute. I think I want to get into the issue of what workers do or don't know as they sign things. And I think it's a really important issue. And I think it's really at the crux of differences in how people view labor policy. I think our view at EPI and our allies tend to view that workers are at great disadvantage when they sit with an employer and trying to arrange a deal. But can the FTC or how does one go about documenting what workers do or don't know about the transaction that they've just made with an employer? Because it's my understanding from lawyers that frequently workers don't know who actually their legal employer is, what the rate of pay is, whether they're covered by the Fair Labor Standards Act or not, or anything. So it'd be great to figure out ways to actually document that and the FTC to do it. But I'm not sure how that can be done. Yeah, can I just, I'm not trying to avoid the question. But I think the idea that do they know or not know what they've signed. I get worried about that because the answer is not to just disclose better when they're signing away their rights. So over the several generations, the FTC, other agencies have essentially said some of these contract terms are illegal and unfair on their face. This happened on the FTC's credit practices rules. There was just outright impermissible to include confessions of judgment, waivers of exemption. And they just said no. So I would not want us to think so much about disclosure because the truth is, is we know that most workers are not movie stars or NFL players who have an agent who is going to negotiate for them on the level playing field. They're accepting whatever is being given to them. So the extent to which that firms using their market power can increase their margins by shoving some of these claws in. I mean, that is something we have to think about. Obviously, it spans labor law. It touches the antitrust laws. Obviously, when it's independent contractors who are not covered often by some labor laws, that's where I think we need to be particularly keen on attacking, whether it's home health care workers, care workers, whatever it may be who are part of or gig economy workers. I think that's really where we see the shifts in the labor market toward non-traditional employment, which is becoming now traditional, unfortunately. And we have to use our tools to do that. So I don't know if that responds, but that's kind of my reaction. They're in the back. Moreville from Baker and Miller in DC. And I had a question about independent workers and the right to unionize. As we know, Clayton X says, the labor of a human being is not a commodity. And do you think that under existing antitrust law, there is some wiggle room to argue that independent workers would unionize or engage in collective action? Or do you believe the laws would have to be amended for that to be permissible? You know, I don't know. The courts have had their interpretations of law. That's not something that maybe they'll be future jurisprudence on that. What I will say is I don't think the antitrust laws were ever intended to stop cooperation between the least powerful economic actors in the economy. So even if that conduct is impermissible, I'm not sure as a matter of prosecutorial discretion, that should be a major focus. So look, again, I don't have a good answer to that. But I think we need to start thinking about if the agencies appear that they are more focused on making sure that some of the least powerful people, how they are trying to get better wages and better jobs, that's probably the wrong emphasis. Hi, Alex Willis with Reorg M&A. So you're obviously one of five commissioners. I'm just wondering, a lot of the deal cases that have been going on were started on when there were only two commissioners. And so I was wondering how the process, like how those are now approached on that you have a full commission, and how you worked to reach consensus and things like that. Yeah. So I obviously wasn't there when there's two. I was always there with a full compliment. But look, I think we launched these hearings about the future of competition and consumer protection. And it is based, I think, my view is on the premise that the consensus view of how the antitrust laws have been applied has been broken. That there is not agreement on the right way forward. And that I think many of us believe there's probably been too permissive. So I think there is some zest to make sure that the agency is seen as credible, as more rigorous, as more vigorous. So I don't want to talk about any specific deal. But I think you'll see that there's going to be differences of opinion. There was a difference of opinion with me on a major merger recently. But I think we try our best to come to consensus. But sometimes there will be legitimate differences of view. And I think the reason why we have five is so that the public can know what they are. Take a couple more. And then back again over there. Mentioned early on that something happened in the late 70s, early 80s, where productivity continued to go up. But it just kept stagnant. Related that to the sort of small-town phenomenon of lack of choice. And it seems like the history of American industry and labor up until around the late 70s was that if jobs closed down in one location, like shoe factories in New England, a lot of employees moved to where the jobs were. At least my subjective kind of impression is that that happens less now. People tend to stay in small towns even when factories closed. And I wonder if you've done any studies on mobility. The willingness of people to move to where the jobs are. Yeah, so I mean, I can't. There are better people to recite them. But there obviously have been studies that show that even when you look at demographic factors, that mobility has decreased, that the dynamism of even business starts or workers moving from place to place has gone down. I got to tell you, though, I don't know if the right answer, which some people suggest, is clear out, empty out the small towns and make them all move to high-cost cities. So I think we have to think about other ways to attack this problem. And mobility is good. But I'll tell you, geographic mobility, we don't live in a country anymore where you can support your family on one job. People, it's two-income earners for so many people. And that's why that makes it even tougher to pick up and move. We obviously saw this in the foreclosure crisis where that was another factor that locked people in when they were so under water on their homes. So I think there's a lot of factors. But I think the new Congress, others, they're going to need to think about what do we do to make sure that people actually do have opportunities all over America that I don't think any of us, New York and San Francisco are great places, but not everyone can move there. So figuring out how people can, how can there be greater competition for jobs and workers across the country, that might not be squarely in what the FTC does. But I think as we think about our priorities, I really want to see us, and I try and talk a lot to the attorneys general, I think the AGs are going to emerge as a very important force in antitrust. I think they're going to be looking about how deals are impacting things locally. And I think some of them are going to be much more interested in challenging based on those local effects. And we're going to need to create the data and the tools so that all of us can be doing that. I think we can take one more probably in the back. Good afternoon. Good morning. I'm Dennis Olson with United Food and Commercial Workers International Union. And I know you were at the OCM meeting back in August and got to talk to a lot of farmers. And one of the big issues, of course, that's been around for years is the really exploitive contracts, especially of poultry growers in the South. And recently, the SBA has actually made a decision where they've curtailed guaranteed government loans to these poultry growers because they've found that they are not, in fact, independent contractors because of the degree of control of these companies through the means of these contracts. And in the meantime, the Trump administration has withdrawn a modest rule that was passed during the Obama administration to redress some of those imbalances. So there's a vacuum there. And my question to you, is there an opening for the FTC to come into that issue and try to provide some help to those poultry growers? And of course, one of those questions, I think that that raises, if they're not independent contractors, are they employees that could actually should be able to unionize instead of being banned by the exemptions to the labor laws? Yeah, so I've been pretty distressed about what we're seeing at the USDA. So the USDA enforces the antitrust laws in the agriculture sector. Those rules are not that to stop unjustly discriminatory practices against farmers and producers, those aren't happening. Obviously, the enforcement arm, it appears as being folded into the Agriculture Marketing Service. So it looks bad. I want to figure out more of what we can do in this space. We obviously cannot enforce our laws against many in that industry. But look, there are clearly large concentrated industries that know they have all the leverage in some of the poorest counties in America to demand whatever they want, because there's simply no other options for people. And I think many of us in this room have heard those stories about how this is just some real abuses. And we've got to figure out what to do between our labor laws, our antitrust laws, and our agriculture laws. But it is pretty bleak. And I think when people feel that they are not given any choice in how they are as farmers, the origins of the country was that small farmers were this apotheosis of independence and autonomy and being able to determine your own destiny. And now that has completely flipped. And I think that is something that we need to get more agencies, DOJ, the Agriculture Department, back in the saddle on that. So before we let you go, I want to ask you one question to close out the conversation in terms of the future course of the FTC and what it needs to be able to begin to meet the moment that we're in. So does the FTC lack the information it needs to do merger look-backs? So we can have more information and have more data about the effects of these mergers and this trend of consolidation on workers and other communities? If it doesn't, is a new law necessary? What kind of information is necessary? How are you thinking about that in terms of creating the foundation of information that we need to change course or revise our direction? Yeah, and so I'll share my bias that in every agency I've worked in, I've always thought about how can we use the tools we have better? Sometimes new laws help, but we have so much more we can do with, we can demand information, we can collect data from across industries within the context of mergers. We can find out that data, analyze it and determine what action we need to take. The FTC was very successful in doing these look-backs, retrospectives on the hospital markets and use that as a vehicle to challenge many hospital mergers going forward. And I think this is a worthy area where we can get smarter and be better because I think consensus is growing about the power of concentration in the ways to essentially reduce a worker's ability to climb the economic ladder. So we should do that. And I think the key is that we need more people to push us to do it. This is not a backwater agency. This is an agency that has a lot of ability to make our markets work a little bit more fairly and to give people and honest businesses a shot at succeeding. Because I don't think any of us want to live in a country where you can't start a company in your garage, you can't have a job as a farmer or whatever it may be and have choices and autonomy. So we have some serious failures in our economic policy over the last decades. And I hope that across the spectrum people are realized it's broken and it's time to fix it. And I think this has to be part of that solution. I think that is a wonderful place to leave it. So thank you so much, Commissioner Chopra. We're gonna, I think, turn it over to our panel now. So I'm gonna welcome Lydia to the stage to introduce our panelists. She's a senior economics reporter at CNN. We are very grateful for her to take some time out of her busy day and have, I think, what's gonna be a very interesting and thought provoking conversation with our esteemed panelists. So bear with us for just a moment while we set things up. Okay, we will keep this rolling. Is this talk on, okay. Hi everyone, that was a great talk by Commissioner Chopra. I'm Lydia. I work for CNN, which is now part of a much larger company, as many of you know. And I'm delighted to have a really esteemed panel here to dig deeper into the economics of labor market power, or buyer power rather in the labor market with folks who've thought about it a lot. So you all have their bios. I won't read through them in detail, but okay, I'll start. Okay, from the home team at EPI. We have Sandeep Bahisen from Open Markets, who is, which is co-sponsoring this event. And then we have visiting Sandeep DePaul, who's a law professor at Wayne State University. So I first wanted to have everybody briefly introduce their work around corporate concentration and how that affects workers. Everybody comes at it from slightly different angles. So we're gonna do like a few minutes each, starting with Sandeep, right? Great. So I'm gonna be a little bit more narrow than my co-panelists, but oh, sorry. I'm gonna talk about the relationship between antitrust law and workers over the past 40 or so years. Looking at the record, I would argue that- I'm getting signals to put this closer. Oh, okay. Antitrust enforcers have not been a friend of American workers. Charitably, we could say that they've been indifferent to the interests of workers, but I would argue the more honest assessment is they've been actively hostile toward workers' interests. I'm gonna focus on one particular area of antitrust law today, merger policy. So when the DOJ and the FTC evaluate mergers, they have generally ignored employer side power and buyer side power more broadly. Their focus has been largely on product markets. When they analyze a merger, they try to determine how that merger is going to affect purchase areas of an intermediate or final consumer good. It appears that they've never challenged or even remedied a merger on labor market grounds alone. Evidently, their operating assumption is that labor markets are generally competitive and that corporate mergers do not threaten this competition. Research over the past year has shown that this assumption is wildly erroneous. Most local labor markets, defined by occupation and commuting zone, are actually highly concentrated. And this employer side concentration is associated with significantly lower wages. So taking all this evidence together, a reasonable hypothesis is that the DOJ and the FTC, by failing to study labor markets and relying on simplistic textbook assumptions, have helped create the labor market monopsony problem that we're now talking about. But I'd argue that the problem is even deeper than this mere indifference. Big question is why have the agency's been so tolerant of consolidation dating back to the early 80s? Antitrust law today is interpreted as a so-called consumer welfare prescription. Under this framework, the antitrust laws permit an even encouraged conduct that lowers prices and increases output as defined by neoclassical economics. So in the context of mergers, the prevailing wisdom is mergers combine capital and create economies of scale and companies by merging lower their costs and can be expected to share some or all of these cost savings with consumers. That's the theory. What does realizing efficiencies and achieving economies of scale mean in practice? It often means firing workers to eliminate so-called redundancies. So two companies come together and eliminate so-called duplicative factories, HR departments, IT staffs, and the like. So the theory is mergers really help consumers by hurting workers, businesses shed workers and share some of the wages and other saved labor costs with consumers. So to make all of this a little bit more concrete, look at the experience of the airline industry over the past 20 or so years. In 2000, we had nine major carriers. Today we have just four thanks to a series of mergers and acquisitions. And what is this M&A activity in airlines meant? Smaller flight crews, fewer ground staff and reduced hub operations in many cities. So companies have gotten much larger and fired tens of thousands of workers. For most people, this would be a categorically negative development. But from the perspective of antitrust enforcers, this is good and desirable for consumers. Airlines have reduced their workforces, reduced their costs and shared these cost savings with the flying public. As I said earlier, this is just the theory. Of course, it doesn't really match with anyone's experience of flying in recent times, but this is the theory on which merger policy has been premised. So then going forward, the agencies can make several changes to help workers instead of hurt workers. A good start in the interim would be looking at the labor market effects of mergers. When two companies merge, the agency should be asking themselves, how is this going to affect the structure for employment for, let's say, accountants in Peoria? But it's not nearly enough. Getting merger policy right is going to require a deep excavation of existing assumptions and an overhaul of the philosophical core of contemporary antitrust. And I think this means confronting the reality that so long as antitrust is rooted in consumer welfare, it's going to be rooted in an anti-worker orientation. Good keeping to time. Okay, who wants to go next, is that? I'll go next. Okay. So, wait, should I use that? Okay. So, my colleague Josh Bivens and I released a paper on monopsony this morning and it sort of does some table setting about the whole issue. So, I'm going to just make a couple of points. So, the first point that I want to make, and this has been referenced by a couple of the earlier speakers, that there's been this slew of research coming out recently on monopoly power, its impact on the labor market on monopsony. And I would just like to state that this research is amazing. It's incredibly important that it sort of provides the backdrop to a lot of the stuff that Commissioner Chopra was talking about. And to show you, to talk about how deeply important this is in the economics field, it's useful to talk about what it is a departure from. So, the jumping off point for these conversations about models of say, monopsony power, the jumping off point are models of perfect competition. And I think it's useful to say that most economists think that perfect, like, use the assumptions of perfect competition to underlie their understanding of how most labor markets work in most cases. And to understand how damaging that is, it is useful to just say what some of the assumptions of perfect competition are. So, these are doozies. So, the assumption is that workers are paid their marginal product, which essentially means workers are paid the value of their worth to the firm and employers have no power to pay workers any less than that and then keep some of the fruits of workers' labor for themselves. So, that's a key assumption. And then sort of knock on assumptions from that is that if an employee is paid less than what their worth to the firm, they can immediately quit their job and instantaneously find another job where they are paid what they are worth. And if the firm who sort of have the audacity to pay them less than what they are worth doesn't start paying their workers what they are worth, they will lose all their workers and go out of business. So, those are the core assumptions of perfect competition and to sort of defend my people, economists, I will say that I don't think any economists actually believes that those assumptions are literally true, but here's the damaging thing. I believe that most economists believe that those assumptions are a tolerable enough approximation to reality that they are totally fine using those assumptions to underlie their understanding of the labor market. And this matters a ton. Like I do a lot of work on labor standards. When you think about proposing, when you think about proposals to increase the minimum wage, you always hear this, oh, but economists say we increase the minimum wage, it's going to cause job loss. That is not like a law of physics. That is based on these models that have as their underlying assumptions perfect competition, that workers are paid, they're worth to the firm and firms are not keeping any of the fruits of the worker's labor. And so, if you have that as your assumption, then the models do show that increasing the minimum wage will cause job loss, but if you depart from these models of perfect competition and actually relax those assumptions, and you allow for the possibility that employers actually can pay workers less than what they're worth, then those models show that if you increase the minimum wage, it does not cause job loss. So you can see why this like conversation that's going on in the economics field is so unbelievably important. It has these like knock on effects for getting economists to start really grappling with models of imperfect competition. That's my first point, sorry, it was long. My first point is I'm super excited about this round of literature, and then the other thing that I think is important to say is I'm also very worried that we will miss this moment. And when I talk about missing this moment, I think that what I mean by that is we shouldn't let the definition of work or of employer power be narrowed to concepts of concentrate, excuse me, to be narrowed to concepts of concentration. We don't wanna narrow it to the idea of limited number of firms. And with that, it's useful to actually discuss what we mean about monopsony, and we were talking about this in the green room. There's like this idea that people are talking about monopsony, a lot of people don't really know what this word actually means. If you're, when you're taught it in econ 101, it always in that setting is means, okay, it's concentration, it's a reduced number of firms with the most extreme example being one firm. Mon, like that's the mono in monopsony. But I think we should all hereby commit to giving up that definition forever. It's not useful, it's actually dangerous. And the, I think a much more useful, intuitive way to think about the word monopsony, to think about what monopsony means is think of it as anytime an employer has power to set a worker's wages below their marginal product, and the, or sorry, think of it this way, anytime an employer, a worker, where the employer was paying them below their marginal product, anytime that worker couldn't instantaneously find another job where they are paid what they're worth, that employer has monopsony power over them. Like that's a much more useful definition, and you can see how many of the things we've talked about today fit in. Concentration of firms, a small number firm fits that, right? If there's a small number of firms, you're much less likely to quickly be able to find another job where you're paid what you're worth. Non-compete agreements, which often come up in this conversation, I like, we should call them monopsony agreements, right? Cause they literally limit your ability to take another job. Temporary guest worker visas that limit the, the guest worker's ability to take, that limit you to one employer. Again, they should just be called monopsony visas. The, so those are things that, that we, that like are very much kind of in the concentration-esque idea, but we should think much more broadly about this. So say you live in a neighborhood that doesn't have good transportation, then you, there may be lots of firms in your area, but you may only be able to easily get to a couple of firms. So those firms have monopsony power over you. Or if you have scheduling needs, like you have to deal with daycare responsibilities, and so you can only be at firms that can provide you the schedules that you need, then those firms have monopsony power over you. One thing that is, if you are lucky enough to have a really connected information network, so you know when good outside jobs come, you are, and you have people who will vouch for you, if when those jobs do arise, the firm has much less monopsony power over you than someone who doesn't have those information networks. If you are a woman or a person of color, and we know because of pervasive discrimination in the labor market, you are on average less likely to be able to quickly find another job where you're paid what you are worth, your firm has more monopsony power over you than they would a white person or a man, et cetera, et cetera, et cetera. Like all, the examples are endless, and it just shows that perfect competition is absolutely and sort of never was an appropriate model for huge swaths of the labor market. And instead, employer power is a sort of ever-present backdrop. So that's the, if we allow this conversation of employer power to be narrowed to concentration, we lose that understanding of just how pervasive it is. And the second thing is we may, this is about the how we may lose this moment. It is because in this amazing new literature that's coming out, talking about concentration, many economic commentators have seized on it to say, okay, we know that there's been huge increases in inequality over the last four decades. Maybe that can be explained by rises in inequality. And I will say, having looked at this literature, I actually don't think that that is true. I do not think that increases in concentration can actually explain a large part of the rise in inequality over the last four decades. So if other commentators come to that same conclusion and they say, ah, well, we tried these models of imperfect competition, but they didn't actually explain this big thing we are trying to explain, rising inequality over the last four decades, so perfect competition it is. Like that's the nightmare scenario that we all want to avoid. So my second point here, sorry I've taken so long, is to say that we all, when we think about the word monopsony, should not just think about concentration, but should instead think about it really broadly in all of the ways that employers can pay workers less than their marginal value, or less than what they are worth to the firm, and keep some of the fruits of those labors for themselves. Okay, now that we have redefined monopsony, which is great because that means that any time I say it, people, they do a double take and I wonder what I'm talking about. Send you to, please. So segueing then from this idea of employer power and thinking about what, just kind of reframing to think about some of the sources of that power in the law, which doesn't just fail to redress. I think we have to shift our frame around anti-trust law a little bit, that it doesn't just fail to redress existing imbalances of power, it creates them. And Sandeep spoke to that a little bit, and I wanna talk about it a little bit more. So since the theme for today is buyer power, I would posit further that if we think about what buyer power is, it can be an employer, it could be another kind of buyer, it's a way of coordinating a market. And the fact that it is a frequent mechanism of coordinating markets in today's economy, I think we can just sort of say that that's a baseline assumption, that could lead us in a couple of directions in terms of a normative basis for policy more generally, which Heidi was starting to talk about. It could lead us in the direction of, oh, it's market coordination by buyers, coordination is bad, so let's try to eliminate all coordination. Or it could lead us in the direction of recognizing that buyer power isn't a particularly good policy choice for coordinating markets for lots of reasons, and lead us to think more about how it's arisen, which I would posit that it's because we've destroyed other forms of market coordination, such as labor unions, public power, and also cooperation among small businesses. And so this leads me to my second big point, which is that I also think we should reframe how we think about antitrust law, which we think it's about promoting competition. And recently there's been a lot of discussion about how it's failed to promote competition. I think that's obviously part of what antitrust law is supposed to do in the sense of promoting a healthy amounts of business rivalry. However, fundamentally, just as a factual matter, not as a matter of my opinion, but as a matter of what antitrust law does, it chooses coordination mechanisms, it does this, and it does that as much as it promotes or fails to promote competition. We have a blind spot about this, I think, and that's why we sort of end up in this type of situation where we're like, oh, now there's all these actors with all this power, how did that happen? So I think competition in this sort of ordinary language sense of business rivalry assumes that there is coordination happening and that we have to make policy choices about what kind of coordination we want to have. So currently, antitrust law I would say, and since sort of the 1970s, the 1980s or so, largely chooses and is strongly biased in favor of coordination mechanisms sort of across legal doctrine that are top-down hierarchical and based on concentrated ownership interests. This is literally written into the law, into the legal doctrine in various areas that we can perhaps talk about in the Q&A. And it's stated very explicitly by Robert Bork, who is an originator of this current antitrust paradigm. I love Robert Bork because he's very honest about exactly what he intended. He was very clear that a substantive preference for consumer welfare in the sense of lower consumer prices was what the paradigm was meant to do. We have all these debates now about consumer welfare standard and is it really about lower consumer prices or is it, well, if you just read Robert Bork, he's very clear about that. And specifically, also written into the paradigm is this assumption that vertical, top-down, ownership-based coordination is what's going to promote lower consumer prices and consumer welfare defined in this narrow sense. Moreover, this just blows my mind, he then goes forward and says, here's five different senses of competition. And he says the economic sense of competition has no use for antitrust law. This is in the antitrust paradox. And I'm going to define the useful sense of competition, which I will now define in terms of consumer welfare, in terms of lower consumer prices. We have this circularity that's literally built in and Bork is who really, I mean, lots of antitrust commentators who might not agree with me about anything else will say that Bork was the major influence on courts and on antitrust decision makers. So this is very influential. We should pay attention to what he said. And so this really is written in and I don't know that there's any way of getting out of it without actually consciously reorienting and thinking about whether those are in fact the policy choices we want to make about how we want to engage in economic coordination. And then finally, I just want to again note what I started off with saying. So that this dominance of buyer power that is sort of the frame for today's discussion as a market coordination mechanism has arisen in many sectors precisely because of conscious policy choices to destroy other market coordination mechanisms, which include labor unions and include public coordination. A great example of this is the trucking industry. And I don't know if I have time, but I wanted to just give one example of how this Borkian paradigm plays out in the fissured workplace and the gig economy, which Commissioner Chopra was speaking to. So I think there's a few examples, but just giving an example of the fast food franchising arrangements, which some of us have been thinking about this week. Powerful franchisers like the McDonald's Corporation have outsized coordination rights under antitrust while workers and franchisees are largely denied those coordination rights. And this is really sort of, well, I wanna say this carefully, it's written into the law, but I also think it can be changed without even without legislation. So I think because the doctrine is such a mess, I think it's possible for courts to see the light and theoretically. It's possible for courts to see the light. And so it's not doctrinally barred is what I wanna say. But under the doctrine that courts mostly follow, what's remarkable about this is that while this sort of, I should have been more specific, this kind of top-down ownership-based coordination, one, the obvious manifestation of that is large powerful firms, which are economic coordination mechanisms. That's what they are, right? But what's interesting about the gig economy and the fissured workplace is that you actually see that same systemic bias and preference that anti-trust law has extend beyond firm boundaries, but only when it is coordinated from above by the powerful, not when it's ice skating teachers or truck drivers or anti-trust law will not tolerate that. And the traditional justification for that is these vertical integration brings these efficiencies. And again, so we can talk about that more, I don't think that there's a lot of empirical basis for it and the gig economy is also very interesting because it lays bare how the systematic preference continues even when there's really no difference. Uber explicitly says that it's not controlling drivers and it's not doing anything other than providing this app, yet it gets the ability to coordinate prices for rides, which if Uber drivers did directly would be considered hardcore cartel conduct, right? And there's no difference in functional integration, so I'll stop there. Okay, amazing. So I know that everybody here is really wonky about monopsony, but maybe those out in the viewership need a little bit more help backing up and just saying, have we established the fact and how do we know that employer concentration is causing a decline in worker bargaining power and thereby working conditions? Like, I know that you all have different ways of defining worker power and it comes in many forms, but can we please, can someone walk us through and make the case for why this is happening more and more? Okay, I'll give it one, I think there's lots of ways to do this and I'm gonna try one. So one of the things that we know is if you think of the, okay, wait, what is, if we, one of the implications of this literature that's come out, I said that I don't think that what we're seeing is this increase in concentration that's explaining the rise and inequality, but what this literature does show is that there, like employer power is this pervasive backdrop to the labor market, like perfect competition sort of never was, instead it's more useful to think about the labor market as this tug of war between employers and workers for who gets what share of the economic growth. And one of the things that we have seen with over the last four decades is this collapse of things that provide, we know employer power is inherent, I talked about a million examples, we've seen this collapse of the things that provided workers with countervailing power, things like unions, things like strong labor standards, et cetera, et cetera, et cetera. So the relative power between employers and workers has shifted dramatically, which has led to the rising, you know, rising inequality, the pay productivity gap that Commissioner Chopra was talking about, et cetera, et cetera. So that's the backdrop to what now I'm gonna actually answer your question. One of the things that if these models of perfect competition were true, we would have seen in this era, the last four decades, where you did see the collapse of things that perfect competition says will hamper growth. So perfect competition says strong labor standards will hamper growth. It says that unions will hamper growth. As in the four decades where those things have eroded, we should have seen a big decline, we should have seen a big unleashing of growth, right? Like as those things decline, we should have seen productivity go through the roof if those things really had been hampering the economy. But instead, in the last four decades, as we have seen the erosion of these things that perfect competition says will hamper growth, growth has actually been even lower than it was in the earlier period where we saw stronger, much stronger unions, much stronger labor standards. And that finding is totally consistent with models of market power. When you have a case where employers are able to set wages below workers marginal product, then when you increase, when things like unions, things like minimum wage increase those wages, it can actually spur growth by boosting efficiencies in the labor market. So the fact that, just to summarize, the fact that in the earlier period when we had stronger unions and stronger labor standards, for example, and we saw much stronger growth, and in the later period when we saw much weaker unions, much weaker labor standards, and we saw also much weaker growth, that is consistent with models of monopsony, models of serious employer power in the labor market, not with models of perfect competition. Okay, so it seems like Heidi is trying to define monopsony away from purely a consequence of concentration and that it's more about relative power and ways in which companies can exert power over workers in whatever form. Like Sandeep, do you agree with that? I agree. I think the increase in employer-side concentration is part of the changing dynamic within labor markets. Employers have become more powerful thanks in part to concentration, but also thanks to changes in law that allowed them to impose arbitration clauses, non-compete clauses, and these other one-sided terms of employment that Commissioner Chopra talked about. But it's part of a larger change and I think at least as important, probably more important has been the erosion and really the destruction of the ability of workers and other small players in the economy to band together and build power. So much like what Heidi said, I think this latest research on monopsony and employer-side concentration should be a starting point to think more broadly about power and reorient the conversation away from things like, well, wages have stagnated because of globalization or technology, monopsony shows us that actually power is the key driver here, but monopsony is just one aspect of that power and we should certainly resist any attempts to shoehorn everything into this neoclassical understanding of monopsony and recognize that power exists in many forms and assets in the labor market. Did you wanna say anything? I'm gonna leave it to the economists to define their concept, but I definitely agree that the concept of economic power should be much broader than concentration or then a deviation from perfect competition. And I think also, I think there are a lot of policy reasons, including worker power to address corporate concentration, which I do think is absolutely a factor in undermining worker power and working people's power. And I think that we should be careful to distinguish necessarily direct employer power from just all kinds of buyer power that affects workers and working people. So for example, in the trucking industry, there was quite a splintering of the sort of direct employer market post deregulation, especially in short haul trucking. And that did not lead to good outcomes for workers. It led to bad outcomes for workers because there was destructive competition between those small low margin firms. But it was still a market that was coordinated by buyer power, but now it was the buyer power of the emerging big box retailers, which was kind of happening at the same time in the 80s. And so anyway, I think it's not inconsistent with any of those findings, but I think we wanna be careful about how we define buyer power. Yeah, I mean, because I feel like there's a lot of people who understand monopsony as really actually that particular type of buyer power that is caused by more and increasing concentration. So if we just like focus on that aspect of it, what to you guys is the best example of that happening that's been like documented proven that it's having negative impacts? So I think one of the most interesting papers in the monopsony research has been, is this paper by Nathan Wilmer is that tries to identify how concentration at one level, let's say Walmart at the retail level has adverse effects upstream. So we talk about concentration as though it's increased uniformly everywhere, but actually if you look at a supply chain like Walmart, you see hyper-concentration at the retail level, then almost atomistic competition upstream where you have often very small firms competing against each other to get Walmart's business. So what you have is Walmart squeezing its suppliers and those suppliers in turn trying to shed costs and offer the lowest price possible to Walmart. And that dynamic often means suppliers squeezing their workers and trying to extract every cent of value out of them. So it's really a combination of monopoly downstream and then hyper-atomistic competition upstream and that combination has really hurt workers and I think Nathan in his paper finds that concentration like the type Walmart has explains something like 10% of the divergence between productivity growth and median wage growth over the past 30 years. I don't know that I have too much to add, I mean I think another, I mean I completely agree with Sandeep and I think franchising can also be seen as a little bit of an example of that in that there's no ability for franchisees so that maybe that's the other substantive point and we've made this point but it's worth re-emphasizing is that I think that this power from consolidation goes hand in hand with something that again the law props up, it's not just this sort of thing that's happening and the law is failing to address it which is these sort of explicit and implicit norms against coordination by workers and independent contractors and all of that but also by frankly by the small trucking firms and by the franchisees and again there's no law of nature that says that they can't do that and that that might not be a good market coordination mechanism and I actually suspect that since I've been sort of working on these issues the number of random emails I've gotten or people coming up to talk to me to say beyond the reported cases and the disputes that you can see how this norm, this anti-coordination norm really plays out including one person who was like an AG of or a GC sorry of some relatively large corporation who told me at a conference I was at last spring that she felt guilty for sending cease and desist letters to the small mom and pop shops that they contracted with when they tried to coordinate to increase their prices and so this I think that there's really a lot of room for doing more research here to document how much effect this anti-trust is actually having to increase this imbalance of power between consolidated entities and as you said splintered ones. So is the better approach then to try to rebalance this equation to break up the larger companies or to simply allow coordination among workers and suppliers to match that power or is it both and? I would say it's both and I think we do need a more structural approach to anti-trust we should see to it that every industry has pick a number 10, 12, 15 firms instead of the two or three that we see across the economy but at the same time also give coordination rights to workers, professionals and small businesses. So right now anti-trust says that collusion which is often coordination is a supreme evil of anti-trust whereas consolidation and monopolization are viewed as much more benign. I think we really need to invert those priorities and what's inject us a reminder may have a case from about three or four years ago. I think three or four of the big propane tank suppliers in the country these tanks that you attached to your barbecue at home got together to strike a better deal with Walmart. These are not small companies, they're medium or even big companies but they felt like they were being crushed by Walmart couldn't even cover their costs and remain viable businesses. So they jointly bargained with Walmart got better terms on their wholesale tanks and what happened the FTC came and sued them and said you engage in illegal price fixing. So this is a case where the FTC was doing Walmart's bidding against two much smaller companies that were trying to even out the playing field and their negotiations with this giant retailer. Yeah, I'll just note also I've done some reporting on Amazon suppliers and would ask them like you seem to be screwed every which way by this platform that you have to operate under have you ever talked to each other? Do you talk to each other? And they're like no we're gonna talk to each other about and like there's forums but any sign of coordination could they could be kicked out the platform? Yeah, yeah. Did anyone have anything else to add? I also was hoping someone could explain a little bit the ways in which corporate consolidation manifests that is not simply a large one giant firm because I think there are the relationships between firms and other more subtle forms of consolidation coordination that are not obvious but operational. So I think I can be responsive to that. So I think a couple of the of the gig economy scenarios that I mentioned fit that. And so I think it's really worth appreciating the extent to which franchisors are able to control franchisees and it's really remarkable. They are able to affect their product pricing decisions. They stop short of sort of asserting that in court that they can do that but they effectively do that through advertising and promotional campaigns and there's cases that I was looking at over the weekend where Burger King sued franchisees who had closed down before the expiration of their contract because they said they were operating at an extreme loss due to the Burger King value menu which they didn't have a choice whether to participate in. There's reports of McDonald's franchisees saying that McDonald's explicitly says to them, well, if you want to improve your margins pay your workers less. And of course at the same time McDonald's is opposing or has opposed any notion that it's a joint employer of franchisee employees. And so the thing to get back to your question the thing to note about that is that this is really a large powerful firm controlling pricing like sort of the key thing for antitrust beyond its formal firm boundaries. So what's really crazy is that since sort of 1984 or so antitrust has kind of expanded this something I call the firm exemption but expanded it for coordination that happens in kind of corporate boardrooms expanded it beyond formal firm boundaries so that when the coordination is top down and hierarchical in nature and it's controlled by kind of a powerful actor at the top it's permitted. And this is what franchisors are doing. Meanwhile, franchisees are not permitted to coordinate. And so this creates these bad outcomes but it's also sort of illogical as a matter of legal doctrine. And then Uber is an example of the same thing where you have coordination happening beyond formal firm boundaries because Uber is explicitly setting the prices of a commodity that it says it doesn't sell. It's committed to saying that it doesn't sell in positions it's taken in various court cases. And that unlike the franchisor situation that has drawn an antitrust lawsuit it's not gonna see the light of day because of the mandatory arbitration clause in the consumer contracts. But with the franchisors we haven't even really seen that fully tested. I would actually also say this is going a little beyond your question but independent contractor firms generally also raise this discrepancy because so for example just again because it's simple to use the trucking example with those firms went over to the independent contractor model very quickly after deregulation it happened very, very quickly because the competition between firms just accelerated very quickly. And again these firms claim as a labor and employment matter that they don't direct drivers and don't do much sort of top-down direction at all. Yet they actually get to set price I mean this sounds kind of radical and crazy to question this but they get to set prices for trucking services in a way that if they employ 20 truck drivers, right? They get to set the prices in that market for those 20 drivers, the services that they do. Not at full but just for use the services. Exactly, well the independent contractor drivers exactly. Those same independent contractor drivers got together and had like a bargaining agent to bargain with the customers that would be a cartel even if they incorporated it would still be illegal. They could be prosecuted criminally for that, you know? That's insane, it's just the really, really crazy and topsy-turvy and again I think the gig economy really sort of heightens these contradictions but it's already existent when we have an economy that's sort of largely being coordinated through monopoly and oligopoly really. I mean that's, I would say that tacitly even though we say competition, competition, tacitly there's a recognition that coordination is necessary and our default mode is that that's how coordination happens. So there's been a couple of local attempts to try to give coordination power back to independent contractors thinking of that socialist crazy land of Seattle where they said that the Teamsters could organize the Uber drivers that's tied up in court. Do those local efforts have potential in the absence of federal laws changing or will there need to be some reinvigorated enforcement and joint employer to make this happen? Not to keep talking but so yes, I think a couple of things. I think that that lawsuit really got bound up in the extent to which the state of Washington was sort of actively, it's one of the elements of the state action exemption from federal antitrust was actively supervising the bargaining or had clearly authorized the Seattle ordinance that she's talking about which I'm realizing does everyone know what she's talking about? The Seattle ordinance authorized collective bargaining rights for ride share drivers in general and then the Chamber of Commerce promptly sued the city of Seattle and really, and Uber was clearly involved in that lawsuit and there's just contradictory positions in that lawsuit versus their defense of their own, the lawsuit that they drew Uber drew from consumers for price fixing but yes, so I think that if the state of Washington or California were to pass an independent contractor bargaining law I think it would have a very good chance under the state action exemption. I think as a policy matter, a lot of federal antitrust folks want to contract the state action exemption and they think it's bad, so there's that happening but there's that but the second point that I actually do wanna make and I was thinking to myself I should say this when commissioner was talking that I think that there's actually nothing to, again in theory if courts were to see the light but there is nothing to stop courts from actually recognizing and permitting not only coordination among independent contractors but also beyond that I think. There's in fact, antitrust lawyers across the board acknowledge that section one of the Sherman Act is inscrutable so when statutes are inscrutable we're supposed to look at what the legislative history said. The legislative history is extremely clear that coordination between workers, farmers, small business was not what was being targeted and frankly they didn't really contemplate a per se rule against price fixing at all if you read the legislative record and that didn't become solidified until probably the 1940s so it was always supposed to be about prosecutorial discretion and what's actually harmful to the economy. So there and one final point is that it's interesting because this sort of expansion of vertical hierarchical coordination beyond firm boundaries which sort of really took a step forward in this case Copperweld in 1984 relied upon a section one case called Appalachian Coals from the 1930s that did permit this type of coordination between sort of horizontally situated small sellers and so that precedent is in a really weird way so I won't, in an illogical way but that precedent is there and has been relied upon fairly recently courts could draw on that today. Awesome, I could ask questions all day but that would be selfish so who in the audience would like to ask a question of our panel? Ma'am. So I'm really, I'm Eileen Appelbaum at the center. Oh yes, Mike's and if you have an affiliation in your name that would be great. So I'm Eileen Appelbaum at the Center for Economic and Policy Research and I really don't understand why Heidi begins with an acceptance of the concept of marginal product and defines monopsony power of employers as deviations of wages below this as examples of monopsony. So the franchisees that you have described who pay their workers less than their marginal products so to speak are all have monopsony power when as you've just pointed out they're completely powerless. So I think that that's a problem. It makes the definition much too wide and I will say one little thing the very first article I ever wrote was about the fact that Keynes kept the concept of marginal product and that I think is what ultimately undermined Keynesian economics and led to the whole micro foundations of Keynesian economics which undermined the general model that he had because once you accept marginal product then you have to ask what are the micro foundations. Keynes was what he needed to be talking about was power relations and we can see that no workers are paid their marginal product. In any unionized shop where the employer has market power and can collect rents workers are paid more than other similar workers who don't have a union. They're not being paid their marginal product. So I'll just stop with that there but I want to talk about Sanzhukta's definition which I think is the right definition and that is you need to look at buyer power the franchisor has the buyer power the franchisee has none the franchisor squeezes the franchisee you see the wages being paid really low wages being paid because the franchisee has no margin with which to respond to higher wages and we see this because we know that the fight is now being taken to McDonald's headquarters and not to the franchisee what is the point of striking the franchisee? What will you be able to gain as a union from that and the unions clearly recognize that? The same thing is true in outsourcing. I mean, question. Well, so what do you think about all of the outsourcing that is going on? The production of goods and services are being moved to these smaller companies that have no market power and then, you know, where is it that the monopoly and monopsony takes place? It's not in the direct setting of wages. I mean, thank you. Thank you. Thank you. Heidi has something to say. No, I just wanted to say that we were in the green room, not kidding, having this a very, very similar conversation. And so I've just been desperately trying to figure out a good way to define this in a way that takes this and really useful thing that's happening in the economics literature and expands it to be useful for all of us. So this is incredibly helpful because this is a totally evolving territory in how we're going to talk about this. So I just welcome these, like, I completely welcome these comments. And yes, because this, the doing it on there, there's some benefit to having a conversation that happens on the terms of people's who you can maybe get them to let go of perfect competition, but then it introduces this whole other host of problems, which you just brought up. So it's super tricky and this is incredibly useful conversation. So thank you. The answer is yes. All right, I'm looking out for another question. Sir, Mike's on its way. This is for Heidi. So post World War II, the median pre-tax profit margin of publicly traded companies is about 9%. So if the things that you referenced this morning in terms of labor is being paid below their real value, their real contribution, margin should be up and they are. They've been running at about 12%. But post-war, it kind of goes up and down. So you can see the margin, and again, these are publicly traded companies, but I assume it's representative of private companies as well. The corporate pre-tax margin is a cyclical thing, but it has been extended above the median and significantly so for the past several years. So my question is, as an economist, do you expect that to correct and to dip back down as it has historically, or because of the things you've talked about this morning, do you expect it to stay elevated for an extended period of time? So I think, I don't know if this is gonna answer your question, but there is this, one of the things we talked about in our paper is how to diagnose whether the increase in inequality that we are seeing is actually the result of an increase in concentration, or do we have to make sure we're talking about all of these things more broadly because we don't wanna narrow it? One of the things that led to my panic about, let's not keep it super narrow about concentration, is that we are not seeing a huge decline in labor's overall share of just the aggregate income in the economy. We are not seeing a massive shift from workers in general, there's some, but it's not a massive shift from workers in general to capital in general. The bigger increase, the bigger thing that's taken a bite out of the income of low and moderate wage workers, is less that labor's total share is declining and more that inequality within labor's share is declining. So I don't, I think it's that that's the dynamic that has been dominant in the period of increasing inequality. So I think it's like, so that's that the, I don't know what we'll see going forward, we are seeing now particularly in the last few years a bigger shift away from labor's total share of income. I don't know if we'll see some of that flip back, but I do think that the, at least what we've seen, the dominant thing is the increase in inequality within which points to that the, if concentration were driving everything, we should definitely have seen a big increase in a big decline in labor share of income since that's not the driving factor, it points towards other things. So I know you only want questions, I'm not just talking about- Conversation perhaps. We'll talk about this. Yeah, okay. Way in the back, great. Hi, Antoine Wallace with Urban Research Strategies and Logistics. In the communities that I work in, East New York, Brownsville, and Baltimore City, right? There's a ample supply for what's monopasy power, right? Many of the workforce development programs provide the type of supply that feeds right into these markets. Can you talk a little bit about the literature that you were referencing earlier as ways for small scale demonstration projects to kind of demonstrate the type of changes that you need to see, particularly when you talk about trucking. I'm thinking about the labor supplies for trucking, the labor supply for franchisees often in fast food work for a lot of the local nonprofits. And if you could kind of create some transparency around that, I think some people who are in the virtual space who are trying to figure out how to place people beyond that market or look for some disruption in that might be able to take some notes from that. I'm not sure if I could ask questions. Do you mean why there's a constant supply of new workers to those industries? I don't have an answer to that question, because I'm a lawyer. There's constantly a supply of workers who are women, people of color who are often going into this type of work where they have unequal power in the face of buyer power. What are some of the ways that you would point people who are working in that space to disrupt that market? So that points to the whole host of things. If you look at the collapse of things that had provided workers with countervailing power, you want to point towards things that could build that back up. So fighting for things like stronger labor standards and their enforcement, policies that will boost unionization, I would go there as a place to provide workers the countervailing power to help create some balance in the labor market versus what we know is this inherent employer power. Yeah, I mean, I would agree is that it's the restoration of coordination rights to those workers through labor unions and through other cooperation mechanisms, potentially, potentially, like so for example, in trucking among the direct employers, I think that would be very beneficial. I did want to just, this isn't really a solution or what you asked, but I did want to just highlight, I think you made a really important point that some of these sectors that we're talking about, it is highly racialized and in trucking less, it's less in terms of gender, but it's interesting that as deep, after deregulation and this transition that happened in trucking, at least in Los Angeles where I was most involved in this, it went from sort of a white middle-class man profession to largely Latino, still male, and Central American refugees for the most part through the 80s and that did provide a constant new supply of workers because of the political turmoil that was happening in Central America and the refugees coming to Los Angeles, that's not really a solution, I'm the solution, I would agree with what Heidi said, but I think it's a very important point to highlight. So that question actually reminds me of a really appalling thing the FTC did about 10 years ago. So we've talked about how the antitrust agencies are very hostile to what we think of as solidarity and they justify this on the basis of protecting competition. About 10 years ago, the governor of Ohio issued an executive order that would grant collective bargaining rights to home health aides. These are workers doing essential work, providing care for the elderly and others who are gravely ill. This is a workforce that's disproportionately female, people of color, and what did the FTC choose to do? It chose to write a letter to the governor of Ohio saying that we have policy objections to your executive order and believe that you're facilitating horizontal price fixing, which is a per se violation of the antitrust laws. So you're seeing a really twisted application of antitrust. It's been neutered against the very powerful and been deployed against some of the most powerless segments of society. So as engaged citizens, we should be demanding that the FTC cease doing things like that. Can I do a quick, very quick follow up to that? Also with these examples, we haven't made an explicit distinction, but we should. That there's sort of bad case law and mainly bad case law because the statute's fine. But then there's also these really policy positions and positions on contested areas of law that various antitrust actors, including the FTC take, and they take it based on kind of this ideology, which again, I think originates in Robert Bork, primarily, most recently, and clear statement of it. So I think it's important to differentiate those because I think there's this way in which antitrust actors and decision makers go way beyond what the law would require and sort of stake out a position that's in this direction where actually the law is a mess. I'm John Russo. I'm former director of the Center for Working Class Studies at Youngstown State, and now I'm at Georgetown. I want to just relate this to a conversation last week in the Commerce Department with the international trade people department where they were asking me some questions about what had happened in Youngstown. And the question is, there was a number of small businessmen that had relationships with a larger company. The larger company loved the product they were making and said, we would love to have you make another bit after this time. The only caveat they had is you have to make the bid in Yuan. And when the person went, Chinese currency. Oh, okay. And then what happened at that, sorry, I can't switch. And so what happened at that particular point was the employer went to the Chinese government and said, fine, you transfer your technology. It seems to me this is another version or area where you're sort of talking about where the employer power is very great and that you actually could practice it internationally beyond the borders. And which I think fits into the type of discussions that are occurring right now about trade policy. So I just wanted to see, and to a larger extent, the types of solutions you're talking about are within a nation state, but not globally. None of us have a good answer. I mean, I would offer the general and sort of banal observation that the current trading system is not working for American workers and needs to be fundamentally reoriented, but I don't want, I can't offer any specifics beyond that. I mean, I think it's a really interesting question and just to put a finer point on it, like, are monopsony problems worse when the employer is a multinational firm that can move jobs wherever? I mean, I certainly think international capital mobility has supercharged the power of big business to effectively say, well, you workers in Youngstown, you can unionize, but if you do, we'll relocate to Shenzhen. So capital has extraordinary international mobility, whereas labor clearly doesn't, so. And that's a capital decision that you don't have to bargain over, probably under labor law. Yeah, and it sounds like it's also a factor in supplier firms, where if they are asked or forced to give away their IP, then that weakens the nation as a whole. Okay, next question? Seeing none for the moment, I'll let you think for a sec, because we do have a good 13 more minutes. So we didn't talk a lot about merger policy because we sort of were in the process of expanding this definition of monopsony. And I was just wondering, Sandy, if you opened by saying that merger policy has been a big problem and that effects on workers have never been a criterion for blocking one, like, how would you even do that? How would you even prospectively prove that this was gonna be a problem for workers if one firm were allowed to establish dominance? Sure. So today, all large corporate mergers in the United States have to follow something called the Hart-Scott-Rudino Notification Process. So they have to submit this fairly elaborate record showing what the two companies do, the markets that they participate in, and identify any product markets where they overlap. Unfortunately, they're not asked about labor market effects. So a very modest positive step for the agencies would just be to add a question in the Hart-Scott-Rudino filing saying what labor markets do you participate in and identify any labor markets where you compete head to head. So that would offer the agencies a window into the labor market effects of mergers. And let's say they find that a particular merger is going to create a single employer in a rural town. That would allow them to take action to address that problem either by requiring some remedy or just blocking the merger outright. So the big problem with merger policy right now is the agencies are just not asking enough questions and they're omitting one important side of market dynamics. And this is something that they could do through rulemaking. They don't need to go to Congress to ask for any new authority. They have the power and hopefully this is something they'll start doing going forward. It's actually good. Yeah, so we have also another, it's like monopsony month here at EPI. We have another event on Monday that will talk, it talks about the labor market impacts of the proposed T-Mobile and Sprint merger. And so it'll get into tons of these issues and it is at 12.30 on Monday here. I have a quick postscript also is that on, I mean on this, I think that corporate law and labor law also have a role to play in the same thing, right? Because labor law, I mean, there would need to be a union obviously, but if there was expanded power to bargain over those type of capital decisions, if there is a union that could be part of this process, but also under corporate law. So if workers were fully recognized as stakeholders and the corporation and the sort of calculus under what is good merger, what would be a good merger as a matter of corporate law policy was changed. Anyway, that's just other solutions to look at besides antitrust. Yeah, I mean it is interesting like thinking about my own corporate overlords, like the union that represents many AT&T workers were very supportive of this merger that in which Time Warner Media was acquired. And that's because now they have the opportunity to perhaps represent many more of those workers. So if, I don't know, if they had a stake in that conversation, then it may have been pro consolidation. I think, no, I mean, I don't mean to get off on all, but I think that that's a really unusual special case, right? And it is the argument that sometimes you hear from labor folks that concentration is good, you know? I think first of all, I think there's a couple of counterarguments to that. I think that's the exception and not the rule, the, you know, what you're describing. And then secondly, I just also, I think that yes, in some way, it's easier to organize larger employers. We all know that. But I think that you get to a certain level of power and like Amazon and it's, I think, much more, the idea, like yes, if you could get them, then you've gotten them, you know? But like, how do you get them when they have that much power? So I personally am skeptical of that idea. And also we should think creatively about labor law solutions. So if we had sort of this kind of small business coordination and if we really looked at expanding multi-employer bargaining, then I think it's not necessarily, then that becomes less of an argument on the labor side. Since we're on the topic of law, I'll also offer a brief post-script on, I think another area of law that's often overlooked in all these debates. And Sanjupta and Commissioner Chopra alluded to it briefly and that's contract law. About 40 years ago in the 60s and the 70s, courts recognized that the consumer relationship, the employment relationship is defined by radical inequality. So courts need to place bounds on what can be done through contract. We had doctrines like unconscionability and unfairness that prevented the stronger player from overreaching. But over the past 30 to 40 years, we've seen a radical rethinking of contract law and a re-importation of a lot of problematic assumptions about how contracts are the product of re-bargaining and negotiation. And as a result, the courts have said, well, if it's in a contract, we're going to enforce it. And what they've effectively said is, the more powerful party in any transaction can engage in effectively private regulation through contract. So I think contract is an area that goes under the radar that is often a way in which powerful employers or powerful sellers exercise power over us. And if we're going to address corporate power at large, I think we need a fundamental rethinking of contract law. Yeah, you can call it, do you have an agent representing you, standard contract law, right? Sorry, sorry. My name is Luis Quintero, professor at Johns Hopkins University. My question was about whether the skill specialization of workers has changed over time. And if that has limited the ability of workers to move across sectors and actually at least threaten partially their employers with moving out if they don't pay them something at least closer to their product, or in a product. Trying to think about how to answer that with something that I actually know. I don't, I can't think of how, wait, state your question again that have skill specialization actually provided workers some power to keep employers? I think less if you are very specialized, it's my ex-ante perception would be it's harder for you to go to another sector if you spent 25 years of your life preparing for this one job. So that makes perfect sense for an individual, like in a cross section. I told, interesting question is, has that increased over time so I can sort of explain some of the dynamics in our labor market? And I don't, I don't actually, I don't know. Like there's this question that Commissioner Chopra was talking about. I mean, the fact, the sort of empirical fact that we know that we've seen a decline in mobility, that we've seen fewer job switchers. If I have never seen anyone try to connect that to this point. So I don't know if it's a big player in that but it could be a factor. So it could be, my guess is that it's not going to be a huge one, but it could be playing a role there. Hello, Deepika Rathod. My question is around the federal rate and why that hasn't been increased. We talk about perfect competition and at the same time you basically, you know, leave people in poverty by not increasing the federal wage. And I would like to understand how you can expect people to be able to be mobile or to survive when actually you're allowing the employer to abuse them effectively by not paying a living wage. I can take a first crack at that. No, everything you just said is absolutely right. And there's definitely, like it is a part of this problem of the assumptions of perfect competition. Economists have provided this enormous cover to lawmakers who actually want to break down things that provide workers power like, just you can't pay me less than this because there's a federal law that says you can't. Economists have provided a ton of power by saying, yeah, those things will all hamper growth, they'll cost jobs. It's a bad idea based on their models that they have in their head of perfect competition. So it's absolutely true. And I just have some, you know, we desperately need to increase the minimum wage. And there's plenty of people, including us. One of our economists was in, it was supposed to be at a minimum wage hearing this morning, but it got canceled by the majority, which is currently Republicans in the house right now last night. But yeah, so there's definitely lots of people fighting for that. It should happen, it would be way better for the economy and hopefully this kind of conversation that we're happening where people can, where we're broadening beyond perfect competition can help that conversation. Okay, we probably have time for one more question if there's one out there. My name's Antonia Jarre, I don't have an affiliation. Would you believe that if we had single payer health care in the United States as they have in other countries, that would open up opportunities for mobility and is there a way to measure that against other economies where they have single payer health insurance? So it would absolutely increase mobility and I don't know of any measures that will, like it's just people get, the job lock problem is real, people get tied to if they're getting their health insurance from their employer, it makes that much harder to move to another employer and I don't, I do not have off the top of my head measures of that. We can talk offline because there could be something useful there in the literature, I just don't know. Yeah, I think there is a lot of post-ACA studies on that and I don't have them on the tip of my head but if you were to run an NBER search, I'm sure they would turn up. Okay, awesome, does anyone have any last burning questions? This has been a great panel. Thank you all for coming, for tuning in on the live stream. Thank you to everyone for speaking and I think that is it from us, Alyssia, you wanna say something, okay? Okay. Okay. Okay. Okay. Okay. I thought we were gonna have two hours. No. I don't know. Oh yeah. I don't know. That would have been not enough. Maybe an hour and a half was like very comfortable. Sorry. Wait, wait, wait. Right. How's it going? It's good. Yeah, I, hi, Wilma, right? Yeah.