On Tap from the Pub

By Tom Field

Executive Summary:

If you seek competitive ideology, look no further than the discussion on what fosters competition.

The catalyst for competition

Here’s a great summer read as you prepare to unwind and relax at the beach or lake, perhaps. It’s The State of Labor Market Competition by the US Treasury Department; March 7, 2022.

It addresses the fascinating nuances of our American job market, including monopolies, unions, minimum wage, and productivity. The 68-page report is not a fast-read, but it’s certainly revealing. Revealing in its honest assessment that a highly-regulated market is our best chance to ensure success and enhance competition.

When one compiles enough facts and statistics, all backed by research, with economic theories described, and accompanied by concise case studies, we have to listen, correct?

Sure we do.

With a grain of salt.

It’s a well-written exposition. For the common folk. Surprisingly easy to follow for a governmental agency. It appears to make its case.

But I’ll just show you 10 words out of the 23,748 words in the report (yes, I had my word processor count them) that obliterate the thesis. The State of Labor Market Competition concludes that we improve competition by:

Increasing and expanding union representation (p. 52) This is simply untrue. You can say unions improve safety, elevate wages, enhance benefits, and provide other contributions to employment conditions; but unions do not expand competition. They actually shrink it and limit market offerings. One microcosmic local example: We just watched a documentary of the Davis H Elliot company and how its growth and building of the electric grid was only possible by its unlikely maneuvering around unions, exercising entrepreneurialism, and collaborating with other companies and entities. (See FRONT’n About Spotlight this issue.)

Policing employment contracts (p. 53) Enforcement on issues such as non-competes, bid-rigging, price-fixing, poaching, wage-fixing, etc. sounds like a noble cause. Employees need protection, yes? Sure, you can rely on a federal governmental agency to preserve all of your rights as a worker; especially since it has such a stellar record of doing exactly that. But even if these rights are best-maintained by rules and laws and penalties, those applications do not increase competition. We’re better off having both good and bad places to work versus all mediocre. Overregulation actually hurts small business and rewards only the biggest players. Innovative win-win employment agreements create competition and thrive in that environment.