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    A Planned Biden Order Aims to Tilt the Job Market Toward Workers

    Noncompete clauses, licensing requirements and corporate mergers have tended to strengthen the hand of business.Hair salon employees can have onerous licensing requirements that vary from state to state. Some barbers have also encountered noncompete agreements.Annie Tritt for The New York TimesAccording to an increasingly influential school of thought in left-of-center economic circles, corporate mergers and some other common business practices have made American workers worse off. The government, this theory holds, should address it.It appears that school has a particularly powerful student: President Biden.This week, the White House is planning to release an executive order focused on competition policy. People familiar with the order say one section has several provisions aimed at increasing competition in the labor market.The order will encourage the Federal Trade Commission to ban or limit noncompete agreements, which employers have increasingly used in recent years to try to hamper workers’ ability to quit for a better job. It encourages the F.T.C. to ban “unnecessary” occupational licensing restrictions, which can make finding new work harder, especially across state lines. And it encourages the F.T.C. and Justice Department to further restrict the ability of employers to share information on worker pay in ways that might amount to collusion.More broadly, the executive order encourages antitrust regulators to consider how mergers might contribute to so-called monopsony — conditions in which workers have few choices of where to work and therefore lack leverage to negotiate higher wages or better benefits.The order will depend on the ability of regulators to carry out the rules the White House seeks and to write them in ways that survive legal challenges. And many of the policies that labor economists see as problematic, including licensing requirements, are set at the state level, leaving a limited federal role.Still, the planned order is the most concerted effort in recent times to use the power of the federal government to tilt the playing field toward workers. It builds on years of research that has made its way from the intellectual fringes to the mainstream.“It’s increasingly appreciated that lack of competition has held down wages and that there’s a lot of scope for government to improve that,” said Jason Furman, who was chairman of the White House Council of Economic Advisers in the Obama administration’s second term. “I don’t think addressing competition issues will miraculously transform inequality in this country, but it will help. The government should be on your side when it comes to wages.”The council published research on these themes toward the end of the Obama presidency, but concrete policy steps were more limited than those the Biden administration is planning to seek. As vice president, Mr. Furman recalled, Mr. Biden was particularly energized by issues around wage collusion and noncompete agreements.Even with backing from the White House, a meaningful gap remains between what academics who study the labor market are finding and the laws governing the relationship between companies and their workers.Ioana Marinescu, an economist at the University of Pennsylvania, analyzed data on 8,000 specific labor markets with two co-authors and found that when a job market was heavily concentrated among a few employers, it resulted in a 5 percent to 17 percent decline in wages.But she said regulators tend to be wary of trying to block a merger on the grounds of its potential labor market impact because of a lack of legal precedent.“Legally we’re on firm ground, but it may or may not be seen that way by some particular judge who has this on their desk,” Professor Marinescu said. “That creates a risk for the agency that doesn’t like the idea they might lose a case.”She said that having pressure from the White House to pursue those legal theories would help, but that congressional legislation explicitly charging antitrust regulators with focusing on labor market conditions would help more.There has been some bipartisan discussion on Capitol Hill about reining in noncompete agreements, particularly after the emergence of some outrage-stoking stories. (Sandwich shops and hair salons contractually barred workers from going to a competitor, for example.) These disputes tend to pit incumbent businesses — who don’t want their workers to be able to quit with potentially valuable information — against start-ups who want more ability to hire people at will.Occupational licensing is also an area with potential for bipartisan agreement, uniting those who want more widespread labor market opportunity with those opposed to excessive regulation. Many more jobs require occupational licenses than in decades past, and typically a license in one state is not easily transferable to another, potentially limiting workers’ ability to move to places where they can earn more. This is particularly problematic for military families, who typically have no choice but to move regularly.Still, there are potential negative effects with the Biden approach. By creating a barrier to entry for workers entering a field, licensing may also keep wages higher for existing workers in those jobs, meaning some people may stand to lose if requirements are revoked. Moreover, research by Peter Q. Blair of Harvard and Bobby Chung of the University of Illinois suggests that women and racial minorities experience less of a pay gap in fields that involve occupational licenses.Put it all together, and the Biden administration’s push for a more competitive, less corporation-friendly labor market is decidedly not a set of magic-bullet policies that will suddenly give workers more market power overnight.Rather, it’s part of a set of policies — other aspects of the president’s agenda very much among them — that over time would nudge the balance of power away from the prevailing order of most of the last 40 years. More

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    The Business Rules the Trump Administration Is Racing to Finish

    #masthead-section-label, #masthead-bar-one { display: none }The Presidential TransitionLatest UpdatesHouse Moves to Remove TrumpHow Impeachment Might WorkBiden Focuses on CrisesCabinet PicksAdvertisementContinue reading the main storySupported byContinue reading the main storyThe Business Rules the Trump Administration Is Racing to FinishFrom tariffs and trade to the status of Uber drivers, regulators are trying to install new rules or reduce regulations before President-elect Joe Biden takes over.President Trump is rushing to put into effect new economic regulations and executive orders before his term comes to a close.Credit…Erin Schaff/The New York TimesJan. 11, 2021, 3:00 a.m. ETIn the remaining days of his administration, President Trump is rushing to put into effect a raft of new regulations and executive orders that are intended to put his stamp on business, trade and the economy.Previous presidents in their final term have used the period between the election and the inauguration to take last-minute actions to extend and seal their agendas. Some of the changes are clearly aimed at making it harder, at least for a time, for the next administration to pursue its goals.Of course, President-elect Joseph R. Biden Jr. could issue new executive orders to overturn Mr. Trump’s. And Democrats in Congress, who will control the House and the Senate, could use the Congressional Review Act to quickly reverse regulatory actions from as far back as late August.Here are some of the things that Mr. Trump and his appointees have done or are trying to do before Mr. Biden’s inauguration on Jan. 20. — Peter EavisProhibiting Chinese apps and other products. Mr. Trump signed an executive order on Tuesday banning transactions with eight Chinese software applications, including Alipay. It was the latest escalation of the president’s economic war with China. Details and the start of the ban will fall to Mr. Biden, who could decide not to follow through on the idea. Separately, the Trump administration has also banned the import of some cotton from the Xinjiang region, where China has detained vast numbers of people who are members of ethnic minorities and forced them to work in fields and factories. In another move, the administration prohibited several Chinese companies, including the chip maker SMIC and the drone maker DJI, from buying American products. The administration is weighing further restrictions on China in its final days, including adding Alibaba and Tencent to a list of companies with ties to the Chinese military, a designation that would prevent Americans from investing in those businesses. — Ana SwansonDefining gig workers as contractors. The Labor Department on Wednesday released the final version of a rule that could classify millions of workers in industries like construction, cleaning and the gig economy as contractors rather than employees, another step toward endorsing the business practices of companies like Uber and Lyft. — Noam ScheiberTrimming social media’s legal shield. The Trump administration recently filed a petition asking the Federal Communications Commission to narrow its interpretation of a powerful legal shield for social media platforms like Facebook and YouTube. If the commission doesn’t act before Inauguration Day, the matter will land in the desk of whomever Mr. Biden picks to lead the agency. — David McCabeTaking the tech giants to court. The Federal Trade Commission filed an antitrust suit against Facebook in December, two months after the Justice Department sued Google. Mr. Biden’s appointees will have to decide how best to move forward with the cases. — David McCabeAdding new cryptocurrency disclosure requirements. The Treasury Department late last month proposed new reporting requirements that it said were intended to prevent money laundering for certain cryptocurrency transactions. It gave only 15 days — over the holidays — for public comment. Lawmakers and digital currency enthusiasts wrote to the Treasury secretary, Steven Mnuchin, to protest and won a short extension. But opponents of the proposed rule say the process and substance are flawed, arguing that the requirement would hinder innovation, and are likely to challenge it in court. — Ephrat LivniLimiting banks on social and environmental issues. The Office of the Comptroller of the Currency is rushing a proposed rule that would ban banks from not lending to certain kinds of businesses, like those in the fossil fuel industry, on environmental or social grounds. The regulator unveiled the proposal on Nov. 20 and limited the time it would accept comments to six weeks despite the interruptions of the holidays. — Emily FlitterOverhauling rules on banks and underserved communities. The Office of the Comptroller of the Currency is also proposing new guidelines on how banks can measure their activities to get credit for fulfilling their obligations under the Community Reinvestment Act, an anti-redlining law that forces them to do business in poor and minority communities. The agency rewrote some of the rules in May, but other regulators — the Federal Reserve and the Federal Deposit Insurance Corporation — did not sign on. — Emily FlitterInsuring “hot money” deposits. On Dec. 15, the F.D.I.C. expanded the eligibility of brokered deposits for insurance coverage. These deposits are infusions of cash into a bank in exchange for a high interest rate, but are known as “hot money” because the clients can move the deposits from bank to bank for higher returns. Critics say the change could put the insurance fund at risk. F.D.I.C. officials said the new rule was needed to “modernize” the brokered deposits system. — Emily FlitterNarrowing regulatory authority over airlines. The Department of Transportation in December authorized a rule, sought by airlines and travel agents, that limits the department’s authority over the industry by defining what constitutes an unfair and deceptive practice. Consumer groups widely opposed the rule. Airlines argued that the rule would limit regulatory overreach. And the department said the definitions it used were in line with its past practice. — Niraj ChokshiRolling back a light bulb rule. The Department of Energy has moved to block a rule that would phase out incandescent light bulbs, which people and businesses have increasingly been replacing with much more efficient LED and compact fluorescent bulbs. The energy secretary, Dan Brouillette, a former auto industry lobbyist, said in December that the Trump administration did not want to limit consumer choice. The rule had been slated to go into effect on Jan. 1 and was required by a law passed in 2007. — Ivan PennAdvertisementContinue reading the main story More