The Appeal - How Antitrust Perpetuates Structural Racism
From The Appeal: Open Markets Institute Legal Director, Sandeep Vaheesan, writes about how antitrust, presently interpreted and applied, maintains the corporate domination of people of color.
Congress enacted the antitrust laws to check corporate power, but today these laws maintain the corporate domination of people of color. Corporations, which are overwhelmingly owned and run by whites, exploit and control Black and brown workers and business proprietors, thanks, in part, to conservative reinterpretations and applications of antitrust. White workers and business owners suffer similar injuries too. But like so many nominally race-neutral laws, policies, and practices in American society, antitrust appears to inflict a disparate impact on people of color, from college athletes and Rocky Mountain shepherds left at the mercy of colluding employers to fast-food franchisees dominated by multinational chains to Uber drivers thwarted from forming unions.
Antitrust law is not destined to remain a tool of racial injustice. Its present perpetuation of hierarchy is a product of the conservative takeover of the federal judiciary and executive branch that began in the 1970s. Supreme Court justices and antitrust officials appointed by Presidents Nixon, Ford, and Reagan reoriented antitrust law to focus on “consumer welfare” and, to advance this aim, loosened various restrictions on corporate behavior—legal and policy choices that the Clinton and Obama administrations accepted. What judges and technocrats did, the American public can reverse. A reconstructed antitrust would control the size and discretion of corporations and permit workers and independent firms to build power. It would serve as an important weapon against corporate hegemony over the working and small proprietor classes and advance the freedom of people of color in the United States.
Take the exploitative system of collegiate sports. College basketball and football players generate billions in annual revenues for their colleges and universities but receive a small fraction of this wealth. College basketball’s March Madness and football’s playoff are among the most popular events in American sports. Operating collectively through the National Collegiate Athletic Association (NCAA), colleges capped the compensation of players at the cost-of-attendance. The Supreme Court called such collusion among rivals “the supreme evil of antitrust.” In practice, players, including the stars, receive around $40,000 of in-kind annual compensation. If colleges competed for players by offering wages and salaries, basketball and football players would earn an estimated $140,000 or more on average. The racial injustice of the system is clear: Some members of the mostly white college coaching ranks make millions of dollars annually while the disproportionately Black athletes subsist.
A May 2020 court decision preserved this system of economic and racial exploitation. Current and former basketball and football players challenged the NCAA’s collusion in an antitrust suit. At trial and on appeal, two federal courts declined to strike down the NCAA’s wage-fixing cartel. (The Open Markets Institute filed an amicus brief in support of the players on appeal.) They invalidated one piece of the NCAA system—limits on payments related to education—but left the rest intact. Elevating the interests of consumers over workers, the judges reasoned that some fans value watching athletes who are not paid like professionals for their talents and hard work. In other words, two courts sacrificed the players’ interest in the name of catering to viewers’ taste for labor exploitation.
Shepherding in the Rocky Mountains is a demanding and thankless job performed by a captive workforce. Ranchers in Colorado, Wyoming, and other Western states recruit shepherds from Peru on guest-worker visas. The terms of the visa bind the shepherds to the ranch that employs them, and the workers live under the constant threat of deportation for any or no reason at all. The laws ensure a supply of low-wage, powerless workers for ranchers. Until recently, these shepherds made less than the standard federal minimum wage and endure the harsh elements of the Rockies without basics such as electricity, running water, or a toilet. Ranchers view the shepherds as “indentured servants who should be subject to even criminal sanction if they refuse to work.” While the shepherds work under exceptionally harsh conditions, their employment relationships are quite representative of work arrangements in agriculture: Farm sector employers hire guest workers, mainly from Latin America, with few rights and pay them appallingly low wages.
Last year, the federal judiciary dismissed the shepherds’ efforts to modestly improve this system through litigation. A group of shepherds alleged that the ranchers had conspired through two hiring associations to all offer the same lowest possible legal wage for job openings in their state. In the absence of this wage-fixing, the shepherds might have earned an hourly wage of $10 or more instead of $4.50. A trial court and court of appeals in Colorado tossed the shepherds’ suit, concluding that the shepherds had failed to show collusion among the ranchers even though the ranchers had set the wage through collective action. (The Open Markets Institute supported the shepherds’ unsuccessful petition for a rehearing.) As in the NCAA litigation, a mostly white class of actors (ranchers) was permitted to collude and profit at the expense of workers of color. Reports indicate wage-fixing occurs in other food and agricultural sectors too.
Read the full article on The Appeal here.