Antitrust Overreach In Labor Markets: A Response to Eric Posner
In this article, I offer a response to the criticisms that Eric Posner has directed at my initial article, which questions the importance that the Biden administration and many law and economics scholars attach to the perceived undue market power that employers enjoy in labor markets. This paper explains why the definition of relevant labor markets for both high-skilled and low-skill workers is, in most cases (certain hospital settings excepted), far broader than the relevant product markets. Thus, the concentration ratios in product markets, which are relevant to antitrust merger policy, have little or no relevance for labor markets, especially today when labor turnover is high: firms are experiencing persistent shortages that are inconsistent with the standard effort of monopsonists to depress wages to create pools of excess labor. I also critique the empirical literature that purports to find widespread evidence of monopsony power and also argue that the current regime dealing with worker covenants not-to-compete is adequate for dealing with the supposed efforts of employers to restrict labor mobility. Accordingly, it is important to guard against both excessive regulation and litigation in an area that functions well under the current legal regime.
