Banning noncompetes is good, actually (with Evan Starr)

Pitchfork Economics with Nick Hanauer

Civic Ventures

Business, Government, News, Politics

4.8 • 1.5K Ratings

🗓️ 4 April 2023

⏱️ 34 minutes

🔗️ Recording | iTunes | RSS

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Summary

One in five American workers has signed a noncompete clause. The FTC believes that the elimination of these clauses would generate extra job opportunities for 30 million workers and raise wages by $300 billion—a huge win for the average American worker. Economist Evan Starr shares findings from his new report on noncompetes and their enforceability in court, which uses data from our home state of Washington. Evan Starr is an Assistant Professor of Management & Organization at the Robert H. Smith School of Business at the University of Maryland. He received a Ph.D. in economics from the University of Michigan. Twitter: @evanpstarr Do Firms Value Court Enforceability of Noncompete Agreements? https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4364674 The Transformation at the Heart of Biden’s Middle-Out Economic Agenda https://prospect.org/economy/2023-02-09-biden-middle-out-agenda Why your noncompete clause is probably illegal https://pitchforkeconomics.com/episode/why-your-non-compete-clause-is-probably-illegal-with-attorney-general-bob-ferguson Website: http://pitchforkeconomics.com Twitter: @PitchforkEcon Instagram: @pitchforkeconomics Nick’s twitter: @NickHanauer

Transcript

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0:00.0	Non-compete agreements have surprisingly been everywhere for a very long time.
0:07.2	And non-compete's are really old. I object to non-compete's. They're anti-competitive,
0:11.2	bad for innovation, bad for everything except the profits of the largest enterprises.
0:16.8	We studied a law that was passed in the state of Washington in 2020.
0:20.8	Yay, Washington. The Washington paper suggests that it's pretty straightforward to justify a ban,
0:25.8	covering at least 80% of workers.
0:32.7	From the home offices of civic ventures in downtown Seattle, this is pitchfork economics,
0:37.7	with Nick Hanauer, the best place to get the truth about who gets what and why.
0:48.8	I'm Nick Hanauer, founder of Civic Ventures.
0:52.1	I'm David Goldstein, senior fellow at Civic Ventures.
1:00.4	Nick, you're a really rich and powerful guy, you know.
1:06.4	That's what I like to tell myself.
1:08.0	Yeah, an important figure in your industry.
1:11.9	And I'm just curious why it is, given your stature, that you have never forced me to sign
1:21.0	a non-compete agreement.
1:22.8	Oh, God.
1:24.3	Where would you go?
1:29.6	That is one of the advantages of this very thin labor market that you and I have.
1:38.7	Nobody else would want me.
1:42.9	But it turns out not all labor markets are as thin as hours.
1:48.0	And non-compete agreements have surprisingly been everywhere for a very long time.
1:55.0	Yeah, it is true.
	...

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