by Sally Hubbard
A growing literature connects increased market concentration with the stark economic and political inequality citizens face today. Speaking at the recent Open Markets Institute conference America’s Monopoly Moment: Work, Innovation, and Control in an Age of Concentrated Power, Senator Elizabeth Warren said that studies show “consolidation even contributes to driving down wages and driving up income inequality.”
What, then, does market consolidation mean for gender inequality?
After all, sexism and monopolization have a lot in common. Sexism wrongfully excludes women and deprives them of equal opportunity to compete on a level playing field, just like monopolies do to startups and smaller firms. Sexism excludes less powerful competitors, prevents competition on the merits, and tilts the scales in favor of the powerful. The glass ceiling is just another cartel.
The “notion of equality has run through antitrust (or competition) law since the beginning of (antitrust) time,” writes NYU Law Professor Eleanor Fox in Competition Policy International. Antitrust law “focuses particularly on equality of opportunity: keeping open pathways for outsiders to contest markets on the merits.”
As monopolistic and oligopolistic power closes these pathways and wreaks havoc on equality of opportunity, it shouldn’t come as a surprise that women are hit especially hard.
Monopolies and oligopolies disproportionately harm female workers
In Market Power and Inequality: The Antitrust Counterrevolution and its Discontents, Lina Khan and Sandeep Vaheesan write that “market power can be a powerful mechanism for transferring wealth from the many among the working and middle classes to the few belonging to the 1% and 0.1% at the top of the income and wealth distribution.” At the Open Markets conference, several speakers, including Thea Lee of Economic Policy Institute, Simcha Barkai of London Business School, Navina Khanna of HEAL Food Alliance, and Tushar Sheth of Civic Advisors, pointed to myriad ways in which market concentration hurts workers and depresses wages.
But when general wages go down or stagnate, female workers are even worse off. Women make 78 cents to a man’s dollar, with black women making 64 cents and Latina women making 54 cents for every dollar a white man makes. As wages by the bottom 99% of earners continue to shrink, women get paid a mere percentage of fewer dollars. And the top 1% of earners are predominantly men.
Open Markets panelists pointed to declines in employee mobility and bargaining power resulting from fewer firms competing in each sector. Not only do workers have fewer options for changing jobs in concentrated markets, they noted, but powerful firms also impose non-compete clauses and no-poach agreements that limit workers’ ability to switch jobs.
With the breadth of sexual harassment finally being brought to light in recent months, any limits on employee mobility disproportionately harm women by constraining their ability to leave hostile work environments.
If workers lose when markets consolidate, C-suite executives and corporate shareholders are the ones who win. “Along with shareholders, top executives also appear to capture a portion of the rents from their firm’s market power,” write Khan and Vaheesan. Thus women, and particularly women of color, are largely not the ones reaping the rewards of market concentration. Women account for only 4.7% of CEOs and 18% of C-suite executives, and women of color hold a mere 3% of C-suite positions.
Investors are disproportionately men too. Sallie Krawcheck, CEO of Ellevest, has written extensively about the gender investing gap.
Concentrated economic power disproportionately harms female entrepreneurs
At the Open Markets conference, I had the pleasure of moderating a panel on the topic of entrepreneurship and innovation in the age of concentrated power. Lillian Salerno, who is currently running for Congress, told the story of how her startup Retractable Technologies was crushed by a monopolist, despite her company’s superior technology that would save lives in the midst of the AIDS epidemic.
Panelist Ross Baird, CEO of Village Capital, explained how the concentration of funding among venture capitalists leads to investment in the wrong things, a topic he explores in his book The Innovation Blind Spot. A “handful of people” (who incidentally are mostly white men) decide which entrepreneurs “get a shot to succeed,” writes Baird. Less than 5% of startup investment goes to women, and less than 1% goes to African-Americans and Latinos.
On my Women Killing It! Podcast—a side passion to my work as an antitrust journalist—I have heard over and over again examples of investors missing out on economic opportunities because of gender bias, both conscious and unconscious.
I interviewed Lynn Perkins, the CEO and co-founder of UrbanSitter, a popular app for hiring babysitters. Because the predominantly male VCs typically did not hire babysitters for their families, they did not see the problem that UrbanSitter was solving. Perkins got funding only after she acquired thousands of active users of her app. But if startups that serve mostly women must demonstrate traction to get funding, the concentration of VC funds among white men is both missing profitable opportunities and skewing the playing field in favor of male founders. Concentrated economic power, gender inequality, and the inefficient allocation of resources go hand in hand.
Monopolization of political power on gender lines
Economic power brings political power, but let’s not forget about the monopolization of political power in its own right. Top political appointments in the current administration have been 80% male, reports The Guardian. Women make up only 20% of members of Congress in 2017, and the majority white male donor class is having an undue influence on policy outcomes.
By allowing economic power to concentrate unfettered, current antitrust doctrine is getting it wrong
Those antitrust experts and practitioners who want to preserve the doctrine’s status quo—either because it benefits their corporate clients or themselves personally, or because changing antitrust doctrine would moot their expertise—will disagree with my perspective set forth here. They will cite case law and economic models and insist antitrust doctrine is not at all about equal opportunity or combatting concentrated power; in their worldview, antitrust is about maximizing corporate efficiencies and ensuring low prices to consumers.
As for monopolization in our economy, nothing can be done, they will argue, citing court precedent that renders Section 2 of the Sherman Act—the provision designed to combat monopolies—completely useless. They forget that case law, by its nature, is designed to evolve.
Many antitrust practitioners seem to have lost the ability to observe the world around them. Regular Americans say things like, “Do we still have antitrust laws? Why isn’t anything being done?” Americans can see that the current interpretation of the antitrust laws is simply not working. Giving a keynote at The Capitol Forum’s Tech Platform and Media Competition conference last week, Columbia Law Professor Tim Wu noted that antitrust has been “on a starvation diet” for the last twenty to thirty years.
Those who favor the status quo criticize “hipster antitrust” as trying to achieve too much with the antitrust laws. At the Charles River Associates conference last week in Brussels, Johannes Laitenberger, the Director General of the European Union’s DG Comp, stated that, “No one claims that competition law can solve all issues in our society.” Nonetheless, “It is possible to have big-picture concerns—about fairness, or inequality, or innovation, for example—while applying rigorous competition enforcement at the same time.” Positive effects on big picture concerns should not be taken as a sign as over-enforcement, he said, adding, “Let’s be ambitious instead.”
At the very least, let’s not be blind to the ways monopolistic and oligopolistic market structures concentrate economic and political power and amplify inequality—gender inequality included.