Competition policy generally focuses on the risks associated with the exploitation of consumers by large companies. So last week the Competition and Markets Authority (CMA) announced it was investigating the alleged merger between Vodafone and Three. Businesses say this will increase investment; Opponents say creating the UK's biggest mobile operator will reduce competition and drive up bills. The CMA must make a decision.
But there is pressure to broaden competition policy: to aim to protect both workers and consumers. After all, if we don't have a choice of who to work with, the chances of things going wrong are pretty high. Businesses can have what economists call a monopoly on workers, just as they can have a monopoly on customers. The result is lower wages, not higher prices.
This is why the CMA also published its first study last week on the theme of “competition and market power”. The bottom line is that it is expensive to work in areas where there are fewer companies competing for your services (which are likely to be outside the South East of England), with a salary reduction of up to 10% compared to more competitive local companies. . Labor markets. Additionally, companies are making it difficult for employees to transition to competitors, with a quarter of employees subject to non-compete clauses.
So kudos to the CMA, but it's someone else's job to act on these findings. Recognizing that employers have power in the labor market shows us why we need a minimum wage (and why it doesn't lead to job losses). This is also why we see worker exploitation in Sports Direct warehouses. And why social workers may accept less than minimum wage: In a female-dominated workforce, with high commitment and a need for flexible local work, there are few alternatives.
So, rather than a regulator blocking mergers, our response should be a government with a good job creation strategy.