Antitrust Article 132 Harv. L. Rev. 536

Antitrust Remedies for Labor Market Power


Recent research indicates that labor market power has contributed to wage inequality and economic stagnation. Although the antitrust laws prohibit firms from restricting competition in labor markets as in product markets, the government does little to address the labor market problem, and private litigation has been rare and mostly unsuccessful. One reason is that the analytic methods for evaluating labor market power in antitrust contexts are far less sophisticated than the legal rules used to judge product market power. To remedy this asymmetry, we propose methods for judging the effects of mergers on labor markets. We also extend our approach to other forms of anticompetitive practices undertaken by employers against workers. We highlight some arguments and evidence indicating that market power may be even more important in labor markets than in product markets.


* Associate Professor of International and Public Affairs and Economics, Columbia University.

** Kirkland & Ellis Distinguished Service Professor of Law, University of Chicago Law School.

*** Principal Researcher, Microsoft Research New England and Visiting Senior Research Scholar, Yale University Department of Economics and Law School. Thanks to Anu Bradford, Lee Fennell, David Gilo, Hiba Hafiz, Scott Hemphill, Torben Iversen, Ioana Marinescu, Jennifer Nou, and participants at a conference on Labor and American Political Economy at Columbia University and at workshops at the University of Chicago and Tel Aviv University for helpful comments, and to Len Goff, Jill Rogowski, and Kyle Trevett for valuable research assistance. Posner thanks the Russell Baker Scholars Fund for financial support.