President Joe Biden issued Executive Order 14036 on July 9, 2021. Titled “Promoting Competition in the American Economy,” the order included 72 initiatives geared at tackling what the President asserts to be the most pressing competition issues the U.S. economy is currently facing. Let’s take a closer look at this executive order and its goals.
Have you Heard of the Promoting Competition in the American Economy Executive Order?
In conjunction with issuing the Promoting Competition in the American Economy Executive Order, the White House issued a statement detailing why the executive order was needed in the first place. Asserting that decades of accelerating corporate consolidation has led to more than 75% of U.S. industries having a small number of large corporations in control, the White House highlighted the pitfalls that can accompany lack of competition within different industries. With only a few large but mighty contenders in control of the market, prices are driven up to new heights for consumers. Furthermore, barriers to healthy competition within the market drive down wages for workers. Fewer employers mean less negotiating power for workers when it comes to wages and respect in the workplace.
In its estimation, the White House approximates that lack of competition, and the resulting increase in prices and decrease in wages, costs the median American household around $5,000 each year. Furthermore, lack of competition stifles economic growth and innovation. The Promoting Competition in the American Economy Executive Order is aimed at reversing the trend of corporate consolidation, and increasing competition so that the American workers can reap the benefits that come with these things. It is an order to promote a government effort in fostering competition in the U.S. economy.
Among the 72 initiatives outlined in the executive order is the goal of making it easier for workers to change jobs and assist in efforts to raise wages by banning and limiting non-compete agreements. In fact, the executive order itself encourages antitrust agencies to focus enforcement efforts on key markets while coordinating with other agencies to encourage the Department of Justice and the Federal Trade Commission to enforce antitrust laws more vigorously. The executive order makes it a point to encourage the FTC to limit or ban non-compete agreements entirely as these are notorious for restricting workers’ ability to demand higher wages and develop better working conditions by stifling competition in labor markets.
It appeared that efforts to comply and promote initiatives outlined in the executive order were slow going. There did not appear to be any immediate developments relating to the actual enforcement of limits or a prohibition on non-compete and non-solicitation agreements. The FTC and DOJ antitrust division did hold an informational workshop on these issues in the beginning of December. The virtual workshop was called “Making Competition Work: Promoting Competition in Labor Markets.