Washington (AFP) - The decline in unionization and moves by employers to stop workers from changing jobs have undermined competition in the US labor market, lowering American salaries by 20 percent, the Treasury Department said Monday.
"Capitalism without competition isn't capitalism.Capitalism without competition is exploitation," Treasury Secretary Janet Yellen said during a roundtable with workers affected by the practices.
The cost of anti-competitive measures are "severe" and "large enough to meaningfully change a family's standards of living," she said.
President Joe Biden has repeatedly blamed corporate consolidation for pushing up prices, and last year he signed an executive order aimed at increasing competition in the world's largest economy.
The Treasury conducted a study, which came out of Biden's order, to look at the impact of increased consolidation on workers.
The report found "the American labor market falls far from the perfect competition that economists had long assumed due to employer concentration and anti-competitive labor practices."
This is a "significant problem," and the report estimated the "lack of competition causes wage declines of roughly 20 percent for workers, relative to what they'd otherwise earn."
Treasury said increasing antitrust enforcement action, making it easier for employees to unionize and raising the minimum wage could improve competition.
"If we want to build a fairer economy, one where it's easier for workers to make a good living, then one of the most important things we can do is put employees and employers on more equal footing," Yellen said.
The report specifically takes aim at business practices such as classifying employees as contractors and having them sign non-compete agreements, which restrict industries they can work in after leaving a position.
Those measures "have forced workers to accept lower wages and worse working conditions."
The report also cites "overly-burdensome licensing requirements" as well as the falling ranks of unionized workers.
The share of US private sector workers who are in a union has declined in recent decades, falling to only 6.1 percent in 2021, according to official data.
Recent efforts to form unions or strike for higher wages and better working conditions have made headlines in the United States, including at major chains like Starbucks and Amazon, where the moves have met with mixed success.
While wages have risen as the US economy recovered from the Covid-19 pandemic, inflation has also spiked to levels not seen in four decades, and the Biden administration has increasingly sought to blame companies for the price increases.
In November, the White House asked the Federal Trade Commission to look into whether oil companies are raising prices unnecessarily, and Biden has called the meatpacking industry a "textbook example" of too much market power in the hands of a few.
Biden has backed hiking the national minimum wage to $15 an hour, but the proposal has gone nowhere in Congress, where his Democratic lawmakers have slim majorities in both houses.
