Labor Market Regulation and Worker Power
Due to a lack of competition among employers in the labor market, employers have monopsony power, or power to pay workers less than what the workers contribute to the employers’ bottom line. “Worker power” is workers’ ability to obtain higher wages and better working conditions. While the antitrust agencies have just begun developing policy and enforcement strategies to regulate employer monopsony, broader government policies that impact market forces, the formation of labor market institutions, and workers’ voices and exit options also play a defining role in shaping worker power relative to employers. For example, in addition to antitrust enforcement, worker power can be enhanced by labor agencies’ regulation of employer/employee status, wage and working condition floors, and workers’ collective action. Worker power can also be enhanced by agencies administering social safety net protections and influencing labor market tightness through monetary policy.
Scholars have yet to assess how federal agencies, whose statutory authority and regulatory purview impact worker power, could best direct their authority, regulatory tools, and expertise towards labor market regulation in the presence of employer monopsony power. This Essay outlines the comparative advantages of federal agencies’ regulations impacting worker power. It then develops a checklist of worker power indicators for agencies to track and operationalize in high-priority policy and enforcement areas and offers a broader worker power agenda through a whole-of-government approach involving interagency coordination to protect and strengthen workers’ voice and exit options.