(c) 2010-2024 Jon L Gelman, All Rights Reserved.

Monday, April 18, 2016

Creating a Competitive Economy: The Verizon Strike

Official photographic portrait of US President...
President Barack ObamaPhoto credit: Wikipedia
On Friday President Obama issued an Executive Order to increase competition in the markets including healthcare and broadband. Most obviously directed to the issues raised by the Verizon strike over low wages, monopolistic activity, stifling technological
expansion and holding the public economic hostages.
"Certain business practices such as unlawful collusion, illegal bid rigging, price fixing, and wage setting, as well as anticompetitive exclusionary conduct and mergers stifle competition and erode the foundation of America's economic vitality. The immediate results of such conduct -- higher prices and poorer service for customers, less innovation, fewer new businesses being launched, and reduced opportunities for workers -- can impact Americans in every walk of life."
Executive Order -- Steps to Increase Competition and Better Inform Consumers and Workers to Support Continued Growth of the American Economy 4/15/16
As commentator Paul Krugman points out in today's NY Times article competition in industry is a component to high wages and resulting increased benefits to workers:

"When Verizon workers went on strike last week, they were mainly protesting efforts to outsource work to low-wage, non-union contractors. But they were also angry about the company’s unwillingness to invest in its own business. In particular, Verizon has shown a remarkable lack of interest in expanding its Fios high-speed Internet network, despite strong demand. 
"But why doesn’t Verizon want to invest? Probably because it doesn’t have to: many customers have no place else to go, so the company can treat its broadband business as a cash cow, with no need to spend money on providing better service (or, speaking from personal experience, on maintaining existing service). 
Robber Baron Recessions NY Times 4/18/16

Workers' compensation benefits are directly and proportionally linked to wages and medical costs. Time will tell when the action taken by President Obama last week will have bearing on the system, especially in light of the the upcoming Presidential election cycle and the threat of the candidates to rule by executive action. Meanwhile the deeply rooted issues of the Verizon strike will grow more attention as the process goes forward.

Jon L. Gelman of Wayne NJ is the author of NJ Workers’ Compensation Law (West-Thompson-Reuters) and co-author of the national treatise, Modern Workers’ Compensation Law (West-Thompson-Reuters).