Monopolies & Labor Day

The fight to protect working people from corporate monopolies

Welcome to You’re Probably Getting Screwed, a weekly newsletter and video series from J.D. Scholten and Justin Stofferahn about the Second Gilded Age and the ways economic concentration is putting politics and profits over working people.

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This weekend is Labor Day, a chance not only to relax and enjoy a final summer holiday, but also an opportunity to remember and celebrate the contributions of American workers and the labor movement. One significant threat to workers is the unchecked rise of monopoly power. While policy tools such as antitrust are often thought of as protections for consumers or small businesses, cracking down on anticompetitive conduct is also critically important for workers.

While it has become little more than window dressing, an early action by Federal Trade Commission Chair Andrew Ferguson was establishing a Joint Labor Task Force to prioritize investigating corporate conduct that harms workers. In announcing the task force Ferguson wrote that “deceptive, unfair, and anticompetitive labor practices are widespread” and identified a range of harmful practices, including noncompete agreements, wage-fixing agreements and the abuse of consolidated power. Of course if Ferguson and the Trump Administration were serious about protecting workers from these harms they would have continued to defend the ban on noncompetes put forth by former FTC Chair Lina Khan.

Khan and other enforcers in the Biden Administration worked to harness antimonopoly as a tool for protecting workers. This included actions like the noncompete ban, stiffer merger guidelines that recognize mega-mergers typically lead to layoffs, and blocking mergers that posed threats to workers. While these actions seemed novel and innovative in the face of four decades of pro-monopoly policy it was also simply reviving the original understanding of competition policy. Senator John Sherman, author of the Sherman Antitrust Act, said in 1892 that a monopoly “commands the price of labor without fear of strikes, for in its field it allows no competitors.”

Source: Library of Congress

That statement by Sherman rings true today. The average local labor market in the U.S. is considered highly concentrated and one out of every eight labor markets is dominated by just a single employer. The result of that, according to a 2022 study by the Treasury Department, is that the average worker earns roughly 20% less than they would if there was more competition. This consolidation can also make it easier for firms to collude against workers to drive down wages. A 2024 wage-fixing settlement with Tyson and other companies in the highly consolidated poultry industry is just one example of this.

Traditional wage-fixing is just the tip of the iceberg. Regular readers are familiar with the many ways artificial intelligence (AI) is being harnessed against everyday Americans, and that includes workers. A report earlier this year on surveillance prices and wages demonstrated how detailed data collection to feed algorithms and artificial intelligence will make it even easier for companies to conspire against workers and drive down wages. A union leader recently told me that when they have pressed employers to disclose how they might be using AI to set wages and working conditions, companies have hidden behind claims of trade secrets.

Monopoly power is not only driving down wages and eliminating jobs, it is changing the very nature of what a job is. Tech giant Amazon has an army of drivers around the country delivering packages in Amazon-branded trucks, but those drivers are all independent contractors. This is despite the fact that these “independent” businesses must deliver packages exclusively for Amazon in vehicles branded by Amazon, and using routes, rates and schedules dictated by Amazon. It is a system of “control without responsibility” where firms can tightly manage individuals while avoiding the legal and financial responsibilities of formal employment. Several decades ago this business model would have been a clear violation of antitrust law.

Source: Labor Notes

The silver lining here is that the many ways in which corporate monopolies are screwing workers is the result of public policy choices and we can make different choices. That not only includes the more traditional set of labor policy tools like minimum wage, misclassification and collective bargaining, but addressing the anticompetitive conduct that squeezes working people. While the Trump Administration’s antitrust enforcers seem mostly interested in providing lip service to workers and Congress is handing out tax breaks to billionaires, states can do a lot.

States can ban noncompetes and prohibit mergers that will harm workers like my home state of Minnesota did in 2023. States can reform their price-fixing laws - which includes wage-fixing - to address the way courts have made it harder to bring price-fixing cases. States can also lead the way by passing legislation that will help address surveillance price and wage setting. States could also strengthen their antitrust laws to more clearly prohibit the use of coercive contracts that exploit workers and limit freedom and mobility. So this Labor Day weekend, let your local legislator know they can do more to protect workers than just showing up for a parade or BBQ and should take on the monopolies screwing our paychecks.

YOU’RE PROBABLY (ALSO) GETTING SCREWED BY:

Data Centers

Electricity prices have risen at twice the rate of inflation over the past year. While multiple factors are at play, including America’s aging energy infrastructure, data centers are a key culprit. Over the past decade data center electricity use tripled and could triple again by 2028. By 2030, according to the International Energy Agency, the US will consume more electricity for processing data than for manufacturing all energy-intensive goods combined, including aluminum, steel, cement and chemicals, according to the International Energy Agency. All of this so companies like Delta can further squeeze a few more bucks from you.

The Pohlads

It has been a rough season for Minnesota Twins fans. Following a firesale trade deadline where management shipped out 40% of the roster, the owners of the Twins (the stingy billionaire family of late owner Carl Pohlad) announced they were no longer attempting to sell the team and instead would be announcing two new minority investors at some point. Instead of a retread of the typical billionaires, myself and Erik Hatlestad of CURE made the case in the Star Tribune recently that the Pohlads should make a fan-owned cooperative one of their new minority partners.

Trump Tax Cuts

A new report from the Congressional Budget Office puts some numbers to what we all knew already, the Big Beautiful Bill will screw working people and benefit the wealthiest Americans. The CBO analysis finds that the poorest Americans will lose roughly $1,200 a year, while the richest 10% will see their income increase by $13,600. According to budget wonk Bobby Kogan, it is the largest transfer of wealth from the poor to the rich in a single law in history

PBMs

Ophthalmologist and comedian Dr. Will Flanary, better known as Dr. Glaucomflecken and his wife Kristin Flanary (known as Lady Glaucomflecken) interviewed Minnesota pharmacist Deb Keaveny, who founded the advocacy organization MNIndys, about why PBMs are one of the worst and least understood actors in our monopolized healthcare system and the ways in which they are destroying community pharmacies.

Comedian Charlie Berens, creator of the Wisconsin-centric Manitowoc Minute, has a hilarious recent segment on the perils of the massive data centers popping up across Wisconsin and the rest of the country.

CEO Pay

Private Equity

A lawmaker once told me, “I was told monopolies are illegal, but everywhere I look I see a monopoly.” Unfortunately that phrase might be more apt for private equity. Not content to loot retailers and nursing homes, private equity has also taken over skateboarding. David Dayen at The American Prospect dug in for a recent piece.

Also Private Equity

Connecticut Senator Chris Murphy recently released a report detailing how private equity has looted the state’s hospitals. From the report’s introduction:

“When I did some digging, I discovered that the primary investor in my children’s pediatric practice is Goldman Sachs, a Wall Street investment bank. The idea that Wall Street would own a pediatrician’s office would have seemed absurd a generation ago, but increasingly that’s how health care in the United States works: financiers want to turn a quick profit, and it doesn’t matter to them whether the businesses they are investing in are flipping houses or chain restaurants or children’s hospitals.” - Senator Murphy

SOME GOOD NEWS

Rural Community wants to break Xcel Monopoly

Slayton, a town of 2,000 people in southwest Minnesota wants to kick Xcel Energy, a large multi-state investor-owned utility, out and replace the company with a municipality-owned utility that would contract with the Nobles Electric Cooperative. The next step in this plan is for the Minnesota Public Utilities Commission to determine what Slayton must pay Xcel for its infrastructure and lost revenue. The PUC’s decision will be critical in determining whether Slayton can move forward or not. There are more details in the Star Tribune (paywall), but you can also find more in the local newspaper, the Wheel Herald.

City Council halts Live Nation takeover

In Portland, Maine one of the most loathed monopolists, Live Nation-Ticketmaster, wants to build a new music venue in a city that still has several independent venues. The City Council voted 6-3 to implement a 180-day moratorium on any such development. While the victory is temporary, it is an example of the kind of first step local governments can take to protect their communities from predatory monopolists. Live Nation is not only a threat to independent music venues, but also independent musicians.

I already struggle to get work in this town as a musician. Allowing Live Nation to come and set up this will take work away from local musician and will make it harder for us to get booked. - Independent musician Katie Delcourt

BEFORE YOU GO

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Break Em’ Up,

Justin Stofferahn