Over the last several decades, American big business has led a sustained assault on unions. And its mission to undermine worker power has had a quiet but important ally: the government.
What do ice skating coaches, organists, public defenders and property managers have in common? They have all been sued by the US government for attempting to raise their incomes through collective action.
US antitrust laws were originally passed to prevent business monopolies. But they’ve been weaponized as an anti-worker tool – ironically strengthening the grip of the same corporate interests the laws were created to weaken. Under both Democratic and Republican administrations, the Department of Justice (DoJ) and the Federal Trade Commission (FTC) have brought numerous suits against workers who have attempted to organize to raise their wages. The DoJ and FTC have done so even as they have permitted corporate consolidation and monopolization across the US economy.
The FTC in particular has rather peculiar priorities. In 2014, it filed antitrust suits against two music-teacher associations over a code of ethics provision that could limit competition among members and increase their incomes. The American public will be relieved to hear that the federal government is throwing the full weight of its power into fighting the sinister menace of fat cat music teachers, who earn a median salary of $67,000.
The FTC can abuse antitrust law this way because of an unfortunate legal loophole. Workers classified as “employees” under federal law enjoy an antitrust exemption and can therefore bargain collectively through unions. But workers classified – or misclassified – as “independent contractors” cannot claim the same legal protection. Twenty million Americans, and growing, fall into that category.
Almost no group of (even nominally) independent workers and professionals is safe from the antitrust cops. Although doctors are a generally well-paid group of professionals, they are often at the mercy of a few powerful private insurance companies. Over the past 30 years, the FTC has filed numerous cases against doctors who attempted to bargain collectively with insurers.
Antitrust authorities have also weighed in against state and local laws granting joint bargaining rights to independent contractors. In November last year, the DoJ and FTC filed a brief in support of Uber and Lyft against a Seattle ordinance granting collective bargaining rights to ride-sharing drivers, who often earn hourly net incomes at or below the local minimum wage.
A decade earlier, the FTC publicly opposed an Ohio executive order that granted collective bargaining rights to home health care workers, who provide essential care for elderly and disabled people. These workers are disproportionately women of color, often live in poverty, and are vulnerable to physical and sexual abuse on the job.
The perversity of all of this only becomes clearer when you consider the general powerlessness of American workers. Only 10.7% of wage and salary workers are members of a union, and in the private sector that figure is 6.5%. (These numbers are likely to decline further in the wake of the supreme court’s recent ruling that public sector workers cannot be required to pay union dues, even if they benefit from a union’s collective bargaining.) Many workers also have only a few employment options where they live. The low rate of unionization and lack of alternatives for many workers in the US make it easier for employers to hold down wages. Furthermore, some 30 million workers are bound by non-compete clauses that prevent them from leaving for greener employment pastures.
This power imbalance between employers and employees has major consequences: wages continue to stagnate, despite a supposedly strong labor market and steady increases in productivity, and nearly half of Americans do not have the savings to meet a modest emergency expense.
The creators of America’s antitrust laws viewed worker collective action as an important check against business monopolies. One of the congressional supporters of the 1890 Sherman Act, a milestone of US antitrust law, described worker collectives as “not only lawful, wise and profitable, but absolutely essential to the existence of the commonwealth itself”. The antitrust exemption for workers holds that “the labor of a human being is not a commodity or an article of commerce”.
Sadly, Congress of today shows far less willingness to protect workers or to limit actual corporate monopolies. If it wanted, for example, Congress could easily extend the antitrust exemption to independent contractors.
In the absence of congressional action, however, the DoJ and the FTC can still reorient their priorities. Now is the time for a change of course. Sworn in last month, the FTC’s four new commissioners could, for instance, focus the agency’s resources on fighting pharmaceutical mergers and broadband monopolies, instead of music teachers. That would be a modest start.