Paper: T-Mobile-Sprint Deal Would Hurt Retail Worker Wages

Economic Policy Institutes says labor impact must be part of review
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The merger of T-Mobile and Sprint would lead to declines in wireless retail store workers of 1%-3% in most markets and up to 7% in the most affected. That is the prediction of a new paper from the Economic Policy Institute and Roosevelt Research Institute.

The paper argues that the government and courts need to take wages and working conditions into account when looking at mergers.

T-Mobile-Sprint

“Historically, antitrust enforcers have only considered the impact of potential mergers on consumers and product markets,” said Roosevelt Institute research director Marshall Steinbaum, the paper's co-author. “But increased market power also jeopardizes workers’ wages and labor markets. Regulators must take this into account as a matter of routine when reviewing mergers.”

In the 50 "most affected" markets, the earnings hit could be as much as $3,276 per year. 

The paper is extrapolated from studies the institute says have shown that concentration in labor markets has a negative impact on wages, and applies that to the retail workers who sell wireless equipment and services.

Steinbaum said that they used "four recent empirical estimates of labor market concentration on earnings" and, given that they all showed concentration negatively affected earnings, they predicted the same.

"We would expect that employers who face upward-sloping labor supply curves thanks to their monop-sony [buyer controls the market] power would maximize profits by using that power to depress wages," the paper says.

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