That’s how much a lack of corporate competition costs the typical U.S. household annually, by one estimate—a problem that President Joe Biden attempted to tackle in a sweeping executive order issued Friday.
Corporate consolidation has led to a lack of competition that has allowed big business to overcharge consumers and underpay workers, Biden said in the order, which directs more than 12 federal agencies to take 72 initiatives to increase competition. The president cited the $5,000 figure from a 2019 book by Thomas Philippon, an economist at New York University, who contends that many sectors of the economy are dominated by fewer and bigger players, making the playing field uncompetitive and driving up prices while eroding wages.
Among other things, Biden’s order encourages the Federal Trade Commission to ban or limit non-compete agreements in employment contracts that prevent workers from taking better jobs with competitors. It also encourages the FTC to ban licensing requirements for certain occupations and asks the regulator to strengthen antitrust rules so that employers can’t reduce wages or benefits by sharing information with one another.
“Lack of competition drives up prices for consumers,” Jen Psaki, Biden’s press secretary, said at a briefing Friday. And, “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.”