Assessing The Effect Of Mergers On Labor Markets

Law360, January 3, 2019

Modern US antitrust enforcement has been motivated primarily by a goal of protecting consumer welfare. There is a growing interest, however, in extending antitrust safeguards from the product market to the labor market. In a Law360 article, “Assessing the Effects of Mergers on Labor Markets,” four Analysis Group consultants – Managing Principals Samuel Weglein and Jee-Yeon Lehmann and Vice Presidents Federico Mantovanelli and Rebecca Scott – comment on the methods and tools proposed in a recent Harvard Law Review article for evaluating the competitive effects of mergers on the labor market.

The Law360 article begins by explaining the concept of labor market power and its sources. The authors then summarize the article’s discussion of how three analytic tools developed for product markets can be applied to the evaluation of merger effects in labor markets: the market definition and concentration approach, the downward wage pressure approach, and the merger simulation approach. Finally, they discuss additional factors that may need to be considered in evaluating labor market effects of mergers.

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Lehmann J, Mantovanelli F, Scott R, Weglein S