05 January 2023

Elections have Consequences

As I have noted before, Biden seems to have assembled the best cabinet in the past few decades, except (of course) Pete Buttigieg (Incompetent and lazy), Anthony Blinken (Insanely bellicose), and Lloyd Austin. (Cheerleader for the military industrial complex)

The best appointment may very well be Lina Khan, head of the FTC, who is now moving to ban non-compete clauses in employment contracts, because, unlike her predecessors going back to some point in the Disco decade, she actually believes in government ensuring fair competition:

In a far-reaching move that could raise wages and increase competition among businesses, the Federal Trade Commission on Thursday unveiled a rule that would block companies from limiting their employees’ ability to work for a rival.

The proposed rule would ban provisions of labor contracts known as noncompete agreements, which prevent workers from leaving for a competitor or starting a competing business for months or years after their employment, often within a certain geographic area. The agreements have applied to workers as varied as sandwich makers, hairstylists, doctors and software engineers.

Studies show that noncompetes, which appear to directly affect roughly 20 percent to 45 percent of U.S. workers in the private sector, hold down pay because job switching is one of the more reliable ways of securing a raise. Many economists believe they help explain why pay for middle-income workers has stagnated in recent decades.

Other studies show that noncompetes protect established companies from start-ups, reducing competition within industries. The arrangements may also harm productivity by making it hard for companies to hire workers who best fit their needs.

The F.T.C. proposal is the latest in a series of aggressive and sometimes unorthodox moves to rein in the power of large companies under the agency’s chair, Lina Khan.

President Biden hailed the proposal on Thursday, saying that noncompete clauses “are designed simply to lower people’s wages.”

Biden is the most pro-worker President in decades.

Kahn's proposal not only invalidates existing agreements in most cases and bans new cases, but it requires employers to tell their workers that this is the case.

You can see the analysis, and the actual text of the proposed rule, here.


marku52 said...

Unless you happen to be a rail worker.

Matthew Saroff said...

Unfortunately true.

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