Occasionally when reading an article, a new insight pops into my head. On 11 January Lex in The Financial Times provided commentary on the efforts of Lina Khan to eliminate the broad use of non-compete clauses in the US workplace. This effort by Khan is worth discussing with nuance and facts.
Lex notes that: “(i)n 2022, the labour market boasted its best-ever nominal gain in wage growth in two decades with wage growth above 5 per cent. Those gains — at the indirect expense of shareholders — would continue if employers could not simply lock employees in any more.”
What is most interesting about this comment is the implicit bias that gains in wages are not as important as the fact that shareholders will receive lower returns. In fact in much of the business press there is a consistent bias that only shareholder returns matter. For society in total, the split of revenue between providers of inputs, financial capital and human capital should be subject to fair negotiations.
The financial press should not be biased in favour of only one of those components. Perhaps a fairer share going to wages would reduce the political polarisation facing so much of the world today.
