Monopolies and Bargaining Power

By Anjali Katta

The Law Students on Workers’ Rights series publishes essays from current and incoming students at some of the top law schools in the country. These essays, submitted for the Charles E. Joseph Employment Law Scholarship, address the question “What are the biggest challenges facing workers’ rights in the future?”

The decline of union membership and the increasing monopoly power of companies are two of the biggest challenges facing workers’ rights in the future. These trends are interrelated, as the decline of unions has weakened the bargaining power of workers, while the increasing concentration of market power in the hands of a few large companies has made it more difficult for workers to demand better wages and working conditions. 

The decline of union membership in the United States has been a long-term trend, with union membership falling from a peak of 35% of the workforce in the 1950s to just 10.3% in 2020, according to the Bureau of Labor Statistics. This decline has been driven by a variety of factors, including changes in the economy, political and legal attacks on unions, and declining public support for organized labor. 

One consequence of declining union membership is that workers have less bargaining power when negotiating with employers. Without the collective bargaining power of unions, workers have little leverage to demand better wages and working conditions, and employers are free to cut costs and increase profits. This has contributed to the rise of low-wage jobs and the erosion of benefits and protections for workers. 

At the same time, the increasing monopoly power of companies has made it even more difficult for workers to demand better wages and working conditions. One consequence of the increasing concentration of market power is that it has become more difficult for workers to organize and demand better wages and working conditions. Large companies often have the resources to resist union organizing efforts, and they can use their market power to put pressure on suppliers and customers to avoid working with unions or to demand lower prices from unionized firms. 

One company that exemplifies the increasing monopoly power of companies and the decreasing power of workers is Amazon. Amazon has been criticized for exploiting their workers by offering low wages, minimal benefits, and poor working conditions, while simultaneously driving smaller competitors out of business through anti-competitive practices. For example, Amazon has faced scrutiny for its treatment of warehouse workers, who have reported grueling working conditions and high injury rates. Amazon has also been accused of using its market power to pressure suppliers and drive down prices, making it difficult for smaller retailers to compete. 

As these examples demonstrate, the increasing monopoly power of companies can have dire consequences for workers, particularly those in low-wage industries where unionization rates are already low. 

Another example of a sector that has seen increasing monopoly power and decreasing worker power is the airline industry. Over the past few decades, the airline industry has experienced a wave of consolidation, with a handful of large companies, including Delta, United, and American Airlines, controlling most of the market. 

This consolidation has made it more difficult for workers in the airline industry to demand better wages and working conditions. For example, in recent years, airline workers have gone on strike to demand better pay and benefits, but they have been met with resistance from their employers, who have argued that they cannot afford to pay higher wages due to the competitive pressures of the industry. At the same time, the consolidation of the industry has made it more difficult for workers to seek alternative employment options, as there are fewer airlines to choose from. This has created a power imbalance between workers and their employers, with workers having little bargaining power and employers having more leverage to dictate wages and working conditions. 

To address these challenges, policymakers and advocates for workers’ rights will need to take bold action. This may include strengthening labor laws to protect workers’ right to organize and bargain collectively, increasing public investment in education and training to help workers adapt to changing industries, and promoting policies that encourage greater competition and reduce the concentration of market power in the hands of a few large companies. Hope also comes from popular organizing, including Amazon’s first warehouse with an independent union. 

Ultimately, the decline of union membership and the increasing monopoly power of companies are symptoms of a broader trend toward economic inequality and the erosion of workers’ rights. To build a more just and equitable economy, we must work to address these challenges head-on and ensure that workers have the power and resources they need to demand fair treatment and a better future.

Reflections from Charles Joseph

Monopolies and a decline in union membership leave workers with less bargaining power. Along similar lines, the rise in forced arbitration agreements means workers have fewer options when employers violate their rights. While Congress recently banned arbitration agreements for sexual harassment cases, in many other areas employees cannot take employers to court for violating workplace rights.

The erosion of workers’ rights comes not from a single source, as Anjali Katta argues, but from numerous interconnected changes. Giving workers more power starts with education, resources, and policy changes. Workers’ rights advocates can make a difference – even when the deck seems stacked against workers.

Anjali Katta holds a bachelor’s in engineering physics from Stanford and is concurrently pursuing a master’s in energy and resources at UC Berkeley with a J.D. at Harvard Law School. She brings experience at the Berkeley Environmental Law Clinic and the Lawrence Berkeley National Labs.

Charles Joseph has over two decades of experience as an NYC employment lawyer. He is the founder of Working Now and Then and the founding partner of Joseph and Kirschenbaum, a firm that has recovered over $140 million for clients.