You're Probably Getting Screwed by State Legislatures
And how they can curb, instead of cater to, corporate power!
Welcome to this Week’s You’re Probably Getting Screwed.
In 1932 Supreme Court Justice Louis Brandeis wrote in a dissent, “...a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.” This was the origin of the phrase “states are laboratories of democracy.” Unfortunately, the laboratory has too often been used to screw working people such as right to work laws, tax cuts for the wealthy, and blocking the expansion of healthcare.
Fortunately, states can instead play a key role in checking excessive economic concentration and with 2024 state legislative sessions across the country kicking off (JD is in Des Moines!) I wanted to talk about how state legislators and other state policymakers can help prevent you from being screwed by corporate power.
One of the most important structural tools states can deploy to decentralize economic power are antitrust laws. Nearly every state has its own antitrust law and state attorneys general can bring antitrust lawsuits under federal laws like the Sherman and Clayton Acts. For example the big antitrust trial of Google this fall was the result of a suit filed by the Department of Justice and joined by several states such as Georgia, Indiana and South Carolina. Sometimes states will take the lead such as the lawsuit against Facebook that New York and nearly every other state filed in 2020 seeking to undo Facebook’s acquisitions of WhatsApp and Instagram.
Do not sleep on the power of state antitrust laws though. Former California Attorney General and current HHS Secretary Xavier Becerra used the state’s antitrust law to crack down on anticompetitive practices by hospital giant Sutter Health such as its use of bundling services to drive up prices. Washington Attorney General Bob Ferguson used his state’s antitrust law to end the use of no-poach clauses, which are agreements among companies to not hire each other’s workers, limiting worker mobility. Ferguson’s work ended no-poach clauses at 237 franchises across Washington including McDonald’s, Anytime Fitness, and Jiffy Lube, and a study found it has increased average workers wages by $1,041.71!
There is a role for state legislators to play as well. In New York and Minnesota legislators have been pushing for creation of an abuse of dominance standard in the antitrust laws so the state can better protect workers and small businesses harmed by dominant companies. Pennsylvania is working to crack down on monopoly profiteering by strengthening the state’s laws against price-fixing. While states such as Wyoming and Texas have increased the penalties for violating state antitrust law.
Antitrust is just one tool for curbing concentrated corporate power though. Last year Minnesota became the fourth state to broadly ban noncompete clauses. Colorado passed a right to repair law for farmers to address the monopoly over repair. North Dakota has a long-standing requirement that pharmacies be owned by pharmacists that has effectively banned pharmacy chains. Illinois created a new grant program to support local grocery store development, and several years ago New York made changes to its price-gouging law so the state can go after the monopolists raising prices. Speaking of prices and getting ripped off, states are also moving to replicate the White House’s efforts to end junk fees (JD will have a bill in Iowa!).
Healthcare is not only highly monopolized, but an area where states can play a huge role. Following a proposed mega-merger by Sanford Health and Fairview Health Services, Minnesota passed a new law cracking down on hospital mergers and it resulted in Sanford and Fairview abandoning their proposal. Rhode Island used a similar law to block a merger that would have given Lifespan and Care New England control of over 70% of the state’s hospital market. West Virginia eliminated pharmacy benefit manager middlemen from its Medicaid program, saving $54.5 million and providing relief to independent pharmacies.
There are plenty of other examples as well, but as you can see action has taken place in red and blue states and in large and small states. Every state has the power to take on monopolists, but policymakers need to know this is a priority for folks. I am blessed to have some really incredible champions to work with in Minnesota, but even I have plenty of meetings with legislators and advocates new to the idea that states can play a role in combating the economic forces that are screwing all of us. That is why they need to hear from you!
You do not need to talk to your legislator about the Sherman Act or abuse of dominance, just share your story of how you are being screwed. If you do want some specific ideas, the American Economic Liberties Project has a range of state-level resources while the Institute for Local Self Reliance and Democracy Policy Network have great state-level antimonopoly toolkits. Of course JD and I are also happy to help so please reach out. You can find who your state legislator is here. Let’s make sure the laboratories of democracy are actually doing the work to protect democracy!
YOU’RE PROBABLY (ALSO) GETTING SCREWED BY:
Wage Theft
According to the Department of Labor, more than 200,000 workers across the country are owed $163.3 million in back pay!!! Currently, the largest amount of unclaimed back wages is in food services. More than 36,000 food service workers have yet to claim wages that they are owed. Other “low wage, high violation” industries include health care and construction.
Tax Policy
Wall Street Owning Nursing Homes
We are having a nursing home crisis in this country. Low wages and low standards are becoming the norm with corporate ownership not being held accountable in a $35 billion industry in the U.S. More and more awful stories about what’s happening in nursing homes are popping up.
Wall Street Buying All of the Houses
A Wall Street firm bought 264 Las Vegas area homes in 1 day!!! A MetLife Investment Management study shows these companies could own close to 40 percent of all U.S. houses by 2030. Yikes!!!
Super Wealthy Not Paying Their Taxes
According to an analysis by American for Tax Fairness of new Federal Reserve data on household income and wealth, America’s billionaires and centi-millionaires (those with at least $100 million of wealth) collectively held at least $8.5 trillion of “unrealized capital gains” in 2022. And yet we can’t have universal healthcare…
Business Leaders May Not Be Telling The Truth… Part 1
Business Leaders May Not Be Telling The Truth… Part 2
For more details, you can read them here.
Economists
Just a reminder that not all economists are equal…
BEFORE YOU GO
Before you go, we need two things from you: 1) if you like something, please share it on social media or the next time you have coffee with a friend. 2) Ideas, if you have any ideas for future newsletter content please comment below. Thank you.
How about all the bills you get with “Shop Supplies” Fuel Surcharge’s etc ? Simply a money grab when the items needed to run a business and constitute basic components are then charged for? My restaurant doesn’t cook your grilled meal and then add a charge for the average gas used? Or you used two napkins, had additional water glass fills or since you like the table by the window and it’s larger chairs that’s an additional purchase cost (airlines!) , and so on.
Thanks for sharing. I work in health care. I am very troubled by the lack of care facilities available for the elderly. Here in Iowa there are news stories of abuse and neglect in the media, we are 49 of 50 states to provide quality care for our aged population. The elderly suffered so much during the pandemic. Now we are facing a future with few options and substandard care for our elderly loved ones. States need to focus on this issue and assure our aging citizens that we "have their backs" as they look at finding some place that cares enough to let them live with dignity and comfort. Iowa needs to increase funding for inspections, right now there are some facilities that have waited 41 months for inspection when mandates require inspections every 12.9 months. Iowa needs to encourage increased wages for those who care for our elderly. Iowa needs to do much more to keep the commitment to care for those who have cared for us.