The popular media likes to hammer on tight labor markets and the sudden increase in worker power, citing rising wages and historic numbers of people quitting their jobs in 2021, but the Office of the Treasury paints a different picture according to a recent study commissioned by the Biden administration. The new report highlights high levels of employer collusion to suppress wages and ensure workers have little incentive to change jobs, contra the narrative of the “Great Resignation.”
The report describes the myriad ways in which employers collaborate to prevent workers from seeking better opportunities elsewhere. These tactics lead to missing out on 15-25% of possible wages a worker might otherwise hope to command, according to estimates in the report.
Many of the favored methods used by employers are tried and true ways to devalue workers, and often ones that have gotten whole industries in hot water before, such as when the Justice department found six massive tech firms stoking anti-competitive behavior in a bid to keep workers. Collusion and unfair practices are not restricted to the rarefied world of Silicon Valley tech workers, however, with outsourcing and subcontracting, as well as mergers and acquisitions, remaining a key way for employers to pay low wage workers even less and keep them from finding other employment in the same field.
These practices have broad ramifications beyond beyond just restricting workers’ abilities to choose where they want to work. They incentivize employers to offer fewer benefits, provide less job security and pay little attention to improving working conditions, and, thanks to a multi-decade effort by free-market ideologues and employers which has left private-sector union membership at historic lows, leave workers few options other than to grin and bear it, while the Justice Department tries to play catchup and expand its antitrust division to focus on job market enforcement.
