President Biden Signs an Executive Order with Potentially Major Implications for Labor Markets
President Joe Biden signed a new executive order on July 9, called the Executive Order on Promoting Competition in the American Economy, aimed at cracking down on monopolies in Big Tech, labor and other sectors. According to a Fact Sheet released by the White House, the Executive Order includes 72 initiatives the President wants over a dozen federal agencies to undertake for the stated purpose of promoting competition throughout the U.S. economy.
The Executive Order finds that “[i]nadequate competition holds back economic growth and innovation,” and establishes a whole-of-government effort to promote competition in the American economy. The White House cites several important statistics in support of its initiatives related to improving competition in the labor markets.
According to the Fact Sheet:
Roughly half of private-sector businesses require at least some employees to enter non-compete agreements, affecting some 36 to 60 million workers.
Overly burdensome occupational licensing requirements impede worker mobility and suppress wages also restrict competition. Today, almost 30% of jobs in the United States require a license, up from less than 5% in the 1950s. Fewer than 5% of occupations that require licensing in at least one state are treated consistently across all 50 states.
Workers may also be harmed by existing guidance provided by the Department of Justice and Federal Trade Commission to Human Resource personnel that allows third parties to make wage data available to employers—and not to workers—in certain circumstances without triggering antitrust scrutiny. This may be used to collaborate to suppress wages and benefits.
In response, the new initiatives will, among other things:
Encourage the Federal Trade Commission (“FTC”) to ban or limit non-compete agreements.
Encourage the FTC to ban unnecessary occupational licensing restrictions that impede economic mobility.
Encourage the FTC and Department of Justice to strengthen antitrust guidance to prevent employers from collaborating to suppress wages or reduce benefits by sharing wage and benefit information with one another.
Establish a White House Competition Council, led by the Director of the National Economic Council, to monitor progress on finalizing the initiatives in the Order and to coordinate the federal government’s response to the rising power of large corporations in the economy.
We expect the Federal Register to publish the Executive Order this week, which will include much more detail regarding these labor-related initiatives and the implications on labor markets.