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Print Vol. 105, Issue 5


Why has Antitrust Law Failed Workers?

Ioana Marinescu & Eric A. Posner

Marinescu is Assistant Professor, School of Social Policy & Practice, University of Pennsylvania, and a faculty research fellow at the National Bureau of Economic Research.

Eric Posner is the Kirkland & Ellis Distinguished Service Professor at University of Chicago

15 Jul 2020

In the last several years, economists have learned about an antitrust problem of vast scope. Far from approximating the conditions of perfect competition as long assumed, most labor markets are characterized by monopsony—meaning that employers pay workers less than their productivity because workers lack a credible threat to quit and find a higherpaying job in the same market. Yet while antitrust law regulates labor monopsony in the same way as it regulates monopoly on the product market side, antitrust litigation against employers is rare. We document both the magnitude of labor monopsony and the paucity of cases and argue that this “litigation gap” exists because antitrust case law, which has developed through product-side litigation, is poorly tailored to labor-side problems. We conclude with four proposals for reform of antitrust law so it can better deter labor monopsony.

To read more, click here: Why has Antitrust Law Failed Workers?