Below is an open letter to Bloomberg:
There is a lot to like in Mark Whitehouse’s op-ed from October 21 (US Labor Markets Aren’t Truly Free) . However, one place he errs is where he writes (emphasis added): “Economists have offered various explanations, including labor-saving technology, weakened unions, and growing competition from lower-wage countries such as China. More recently, though, they’ve identified another: The job market has become less free. The consolidation of American business has left people with fewer places to work, shifting the balance of power to employers.
The consolidation of American businesses does not necessarily mean the job market is less free. So long as workers are free to move jobs or relocate, then the job market remains free regardless of its concentration. So long as transactions are coluntarily entered into and there is no outside interference, the exact structure of a market does not matter when determining freedom.
It is not from the concentration of the market that the lack of freedom arises, but rather the other factors Mr Whitehouse identifies: property zoning, non-poaching agreements, etc. The industry concentration may be a symptom of these lack of freedoms, but they are not the cause thereof.