Biden’s latest executive order empowers workers in 3 key ways
President Joe Biden signed an executive order promoting economic competition on Friday that includes three provisions designed to improve opportunities for workers.
The president’s order asks the Federal Trade Commission to limit or ban noncompete agreements, address unnecessary occupational license requirements, and revise guidance for sharing wage information between HR professionals.
“Barriers to competition are also driving down wages for workers,” the White House said in a statement on Friday. “When there are only a few employers in town, workers have less opportunity to bargain for a higher wage and to demand dignity and respect in the workplace.”
Noncompete agreements
Noncompete agreements prevent workers from going to a competitor or starting a competing business within a certain period after leaving their previous job. Between 36 million and 60 million private-sector workers were subject to noncompete agreements in 2019, according to estimates by the Economic Policy Institute.
“The only economic leverage that non-unionized workers have is the implicit threat that they could quit and go somewhere else,” Heidi Shierholz, senior economist and director of policy at the Economic Policy Institute, told Yahoo Money. “Noncompete agreements reduce wages. Your employer doesn’t have to pay you bigger wages if they know that you don’t have outside options.”
Limiting noncompete agreements or making them unenforceable — as Biden’s order sets out to do — may not be enough, according to Shierholz. Banning them instead would give workers more leverage, she said.
For instance, noncompete agreements are unenforceable in California, but some research has found that they still suppress wages because workers often don’t know they can’t be sued by their employers, according to a 2020 paper by the Journal of Law, Economics, and Organization.
Occupational licensing
Biden’s order also asks the FTC to ban “unnecessary” restrictions on occupational licensing. About 30% of U.S. jobs require this kind of licensing, according to estimates by the Federal Trade Commission. But these restrictions stifle entry into these occupations, limit job growth, and make moves between states more difficult, according to Alexander Colvin, a labor relations law professor at Cornell University.
“Research has found that occupational licensing is quite widespread and really does inhibit a lot of workers from entry into jobs and business opportunities that they otherwise would be able to take advantage of,” Colvin told Yahoo Money. “This is quite significant to these potential rules which would really affect the labor force a lot.”
Such licensing particularly burdens military spouses, with 1 in 3 of them working in a field requiring a license while being subject to moves every few years, according to data by the Department of Defense.
Wage sharing
The executive order also asks the FTC and the Department of Justice to strengthen guidance to prevent employers from sharing wage and benefit information with one another to suppress wages.
Current guidance allows third parties to make wage data available to employers without being subject to antitrust scrutiny. But workers aren’t entitled to know how their compensation stacks up against the pay of other workers with similar experience and skills, key information that could help them negotiate better wages.
“As a package, [it’s] clearly a coordinated effort to try and shift the labor market functions to give more power to workers,” Colvin said. “It’s clearly a pro-wage growth agenda that the administration is trying to push here.”
Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova
The initial question is, where does a president get the authority to issue an Executive Order that binds all citizens? They have all issued these orders, it is not a red-cult/blue-cult thing, they all seem to believe that they have dictatorial power. EOs were supposed to be a means by which the president could order those in the Executive branch to do or not do certain things – not orders for the citizens of the entire nation.
So is it possible that good can come from an act of tyranny, possible. EOs are another indication that the entire system has failed.
It is called creeping incrementalism and governments use the tactic “to protect the people” dontchaknow? It starts as something that is quite innocuous and before you know it, they are telling you what kind of light bulb you can buy or what kind of toilet to install in “your” house.
In early America, Congress passed the Whiskey Tax to pay off the war debt. I doubt Congress had the authority to levy a tax on a product that did not enter into interstate commerce, but they did and they used the militia to enforce the tax when distillers failed to pay the tax and attacked the tax collectors. the distillers were only acting in the same manner as the Founders when they threw a bunch of tea in Boston Harbor.
Governments take as much power as they can and they have a mighty big stick to use against us if only a few stand up to them. As long as they can keep that vocal minority to a very small number, they will maintain their power.
Even if he did something right it will do far less for American workers than closing the border or ending the Visa worker program would.
That is true. Especially the border.
John Stossel has done several segments on how licensing of trades has kept down competition while inflating wages for those who do hold the license.
In my hometown, there is one licensed plumber. If you want someone else to do your plumbing, you will have to pay time and mileage for one to come from 40 miles away, so he is free to charge whatever the market will bear. there is also a requirement that an apprentice must have 3 years OTJ to sit for the plumber’s license. The local guy never keeps an apprentice for more than 2 years. It’s a sweet racket he has going on.
Most states require a beautician’s license to braid hair. This is something little girls learn at an early age and can be done by anyone will good dexterity.
I did not know non-compete clauses were used for many employees, other than creative types and executives with lots of insider information.
Lots of scientific/research positions too….intellectual property and all.
“Unnecessary restrictions on occupational licensing…..” What the hell does that mean when the rubber finally meets the road? By the time the backroom lobbyists are done, none will disappear, and likely way more new ones will show up. Why is the government deciding who should be allowed to do a job in the first place???
Mr Liberty “what the hell does that mean?” What it means to me a licensed funeral director is that each state funeral board has its own rules and exams which I must pass to practice in their state. Never mind that I may be licensed in a state next door. Meanwhile a registered nurse can move from state to state and practice with no re-exam. It’s kind of like concealed carry permits not having reciprocity across state lines. Not being able to work in an another state without re-testing even though the job is the same only enriches the funeral board, sometimes to the tune of $500 or more in fees, in the differing states.
Well as far as non-compete agreements, they are BS. We were acquired 4 years ago by a huge company. My pay has been dropping to the tune of almost 20% along with the rest of us in sales. My customers buy from me not because of the company I work for but the service I give them. If I walk out it would be a year before I could circle back to my customer base. I think a non-compete should be compensated for if you have to sign one. Here sign this and here’s your $20K or something. I realize intellectual property is different
I’m not even close to being an expert on non-competes but, I keep being told they are mostly unenforceable. I think they are used as a scare tactic. I’ve heard some crazy things like keeping employees from going to a competitor even though said employee is not a salesman and has no company secrets to divulge or even if the job and skills they have are not and/or were not invented or patented by the company requiring a non-compete clause. Most employees would be scared into compliance.
Yes and no. I’ve seen it enforced. I go to work for company A and company B threatens a law suit. Company B has deep pockets and a staff of legal. Company A starts a cost benefit analysis and tells me to take a hike is the way it works.
https://populist.press/bidens-doj-begins-making-list-of-patriots-to-target/
Non competes are bad for the consumer and the economy.
Biden’s done a few good things. This thing about non-competes, he’s getting us out of Afghanistan even though the Taliban is going to take over and he did some other EO to help facilitate pharmaceutical reimportation. He also stopped hassling the Russians about their Nordstream 2 gas pipeline under the Baltic Sea (to Germany). That probably really pissed off the Russia-hating (((neocons))) who want to bring Russia to its knees. He’s not as dumb as I thought. With the murder rate shooting up, he’s smart enough to promise more money for cops in an effort to get some stupid “infrastructure” bill – even though they don’t need money as much as they need to be able to turn the fire hoses on BLM protesters. He’ll probably tell anyone who wants to send US troops to Haiti to suck an egg.