Treasury report says lack of competition in U.S. job market keeping wages low

Worker's rights advocates rally outside the U.S. Capitol in Washington, D.C., on May 19, 2021, calling for an increase in the minimum wage to $15 an hour. File Photo by Tasos Katopodis/UPI

March 7 (UPI) — A report from the Treasury Department on Monday pushed back some against the popular belief that the present job market is a workers’ market — underscoring that companies on the whole are still able to get away with underpaying employees.

The report, titled “The State of Labor Market Competition,” was compiled with the departments of Justice and Labor and the Federal Trade Commission.

The assessment says that employers are able to keep paying lower wages because there’s not much competition for their workers. That lack of competition, it adds, costs workers 15-25% of what they might otherwise qualify to make.

“Employers also use their market power to impose other costs on workers, including unpredictable just-in-time schedules, punishing work conditions, and no opportunity for advancement,” the study says.

Further, it says that outsourcing U.S. jobs has reduced wages by as much as 24% in some industries, and a decline in unions has robbed employees of bargaining power that could increase their pay and lead to better working conditions.

The lack of competition most often hurts women and communities of color, who make up a larger share of workers in lower-paid occupations.

“These workers often have diminished bargaining power because they lack the resources to easily switch jobs or occupations, to reject or negotiate against signing restrictive employment agreements, or to seek legal recourse for violations of labor and employment law,” the study says.

The report is part of a pledge President Joe Biden made last year to look into the impact of anti-competitive practices in the job market.

Biden will host a roundtable with Cabinet officials on Monday afternoon that will focus on the findings of the report. He will make remarks during the meeting at 3:30 p.m. EST.

Treasury Secretary Janet Yellen, Attorney General Merrick Garland, Labor Secretary Marty Walsh, Federal Trade Commission Chair Lina Khan, Council of Economic Advisors Chair Cecilia Rouse and National Economic Council Director Brian Deese will attend the meeting — which will hear from workers about harms caused by anti-competitive practices.


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