Labor Antitrust: A Solution in Search of Evidence

By: Geoffrey A. Manne & Brian Albrecht (Truth On The Market)

In this article, authors Geoffrey A. Manne & Brian Albrecht examine the growing emphasis on labor-market power in antitrust enforcement, engaging with the empirical and practical challenges of this policy focus. In a recent ProMarket piece, Eric Posner contends that robust academic evidence supports extending antitrust scrutiny to labor markets, while criticizing FTC Commissioner Melissa Holyoak’s skepticism regarding labor-related provisions in the FTC’s initially proposed Hart-Scott-Rodino (HSR) rule changes.

These proposed changes, introduced in 2023, would have required firms to report detailed information about employee demographics, workplace-safety issues, and local labor-market competition, aiming to help the FTC assess potential labor-market effects of transactions. Ultimately, the finalized HSR rules, supported unanimously by the commission, omitted these labor-market provisions.

Manne and Albrecht argue that Posner’s confidence in the evidentiary basis for expanded labor-market enforcement is overstated. As highlighted in their forthcoming paper in the DePaul Law Review, cited by Holyoak, the research on labor-market power and its implications for antitrust remains nascent.

The authors note that despite claims about the necessity of heightened antitrust action in labor markets, the empirical evidence directly linking mergers to adverse labor outcomes is sparse. Posner himself acknowledges the limited number of studies addressing wage reductions following mergers in concentrated labor markets, citing only two key papers by Elena Prager and Matthew Schmitt, and David Arnold. These studies, while significant, offer mixed findings on the effects of mergers on labor markets…

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