{"id":597447,"date":"2023-01-14T05:49:20","date_gmt":"2023-01-14T11:49:20","guid":{"rendered":"https:\/\/news.sellorbuyhomefast.com\/index.php\/2023\/01\/14\/lina-khans-plan-to-liberate-us-workers\/"},"modified":"2023-01-14T05:49:20","modified_gmt":"2023-01-14T11:49:20","slug":"lina-khans-plan-to-liberate-us-workers","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2023\/01\/14\/lina-khans-plan-to-liberate-us-workers\/","title":{"rendered":"Lina Khan\u2019s Plan to Liberate US Workers"},"content":{"rendered":"
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Well before she<\/span> became\u00a0chair of the Federal Trade Commission<\/a>, Lina Khan had her eye on the practice of employers banning workers from job-hopping to a competitor. She is no fan of noncompete clauses. Those restrictions are commonly forced on employees, sometimes without informing them. By preventing workers from taking on new, presumably higher-paid jobs, they can depress wages and opportunities for advancement. And though conservatives might believe that the FTC should keep its nose out of stuff that doesn\u2019t involve antitrust or consumer harm,\u00a0one speaker<\/a> in a 2020 FTC workshop about the issue noted that the very name of the problem seemed to call for action from the agency charged with ending practices that stifle competition:\u00a0Noncompetes.<\/em><\/p>\n

So it was not exactly a shock last week when Khan announced\u00a0a proposed rule<\/a> that would ban employers from issuing noncompete restrictions. It was the kind of presumptuous move that people expect from Khan, who came to the post as\u00a0an unabashed skeptic<\/a> of the bromides of big business. Still, it\u2019s breathtaking how many US workers would be liberated by this rule. \u201cOne in five,\u201d she says in a Zoom call we had this week. \u201cAnd that\u2019s a conservative estimate.\u201d She\u2019s even got an estimate of how much those clauses cost workers: $300 billion<\/a> every year.<\/p>\n

Right before announcing the\u00a0Non-Compete Clause Rule<\/a>, Khan\u2019s FTC set the plate by revealing\u00a0settlements<\/a> with three companies that egregiously abused the practice. One involved Michigan-based\u00a0Prudential Security<\/a>, which forced its low-wage security guards to sign contracts agreeing not to work in the field within 100 miles of the job site for two years\u2014or face a $100,000 penalty. In the text of the proposal for the new rule, she notes some other examples, including one restricting workers at a sandwich shop from \u201cselling submarine, hero-type, deli-style, pita and or wrapped or rolled sandwiches within three miles of any of the chain\u2019s more than 2,000 locations.\u201d (Who knew that\u00a0Jimmy John\u2019s<\/a> had so many stores?) Those cherry-picked cases make noncompete clauses seem supervillain-ish.<\/p>\n

Wages aside, Khan emphasizes that noncompete clauses impose a deeper harm on the economy by discouraging innovation. \u201cScholars have found that one thing that really promotes innovation is the easy flow of information and knowledge,\u201d she says. \u201cWhen you lock in workers, most innovation is totally blocked.\u201d While she admits such effects are hard to measure, she says that those scholars have documented a number of \u201cnatural experiments\u201d that prove the point.\u00a0<\/p>\n

The most canonical natural experiment of all is the\u00a0contrast between the fates<\/a> of Boston\u2019s Route 128 corridor and the Bay Area\u2019s Silicon Valley. In the 1960s, those tech regions were closely competitive. But California has a law that forbids noncompete clauses.\u00a0Some attribute<\/a> at least part of Silicon Valley\u2019s success to the freedom tech workers have to move to competing firms unencumbered, or to become founders without a year or two in the noncompete penalty box. Meanwhile, the locked-in geeks on Route 128 grew whiskers\u2014or migrated west\u2014while their employers at\u00a0DEC<\/a> tried to figure out what that PC thing was all about.<\/p>\n

Conservatives despise Khan\u2019s proposed rule.\u00a0The Wall Street Journal<\/em> opinion page calls it \u201can air kiss to Big Labor<\/a>.\u201d The lone Republican FTC commissioner, Christine S. Wilson,\u00a0strongly opposes<\/a> the rule, in part because, well, we\u2019ve had noncompete clauses since forever, and anyway, who does the FTC think it is?<\/p>\n<\/div>\n

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\u201cI am dubious that three unelected technocrats have somehow hit on the right way to think about noncompetes and that all the preceding legal minds to examine this issue have gotten it wrong,\u201d she writes, as an unelected technocrat herself. The US Chamber of Commerce calls the proposed change an \u201cunlawful action<\/a>\u201d and claims that getting rid of noncompetes will\u00a0depress<\/em> innovation. Why would a company bother to invest in innovation, or even to train workers in specialized skills, if those ingrates could walk that knowledge out the door?<\/p>\n

Khan drily notes that companies in California, despite the state\u2019s ban on noncompetes, have managed to innovate pretty well. You know \u2026 Apple, Disney, Google, the guy who\u00a0invented the AeroPress<\/a>. And she\u2019s got a message for those firms which will now face the scary prospect of losing those clauses if the FTC rule becomes official. \u201cAt the end of the day, companies have to invest in workers if they want to be successful,\u201d she says. \u201cYou retain talent by actually competing, offering them better wages, better benefits, better training and investment opportunities. That\u2019s how you keep retention high rather than locking workers in place.\u201d<\/p>\n

As for the fear of workers swiping intellectual property, Khan says her rule won\u2019t affect trade-secrets litigation, though she doesn\u2019t want trade-secrets restrictions interpreted so broadly that they become a shadow form of noncompete.<\/p>\n

While the non-noncompete rule is only in the proposal stage, Khan thinks that her agency has made a pretty good case. \u201cI mean, it’s a 218-page rule!\u201d she says. \u201cAlmost a half of that is reviewing very, very carefully the empirical studies.\u201d But she also encourages everyone with an opinion or relevant evidence to chime in during the 60-day comment period ending March 10 and says the agency will look at everything with an open mind. But with a 3\u20131 majority of Democrat commissioners, it\u2019s fair to predict that the agency will get its rule in some form or other.<\/p>\n

I ask Khan whether she views the rule as a natural experiment of her own, testing to see how much the FTC can get away with before the Supreme Court raps her knuckles. Last June,\u00a0the court ruled<\/a> that the EPA overstepped its bounds in regulating carbon emissions. Concurring with the majority opinion, Justice Neil Gorsuch promoted a doctrine that agencies can\u2019t make sweeping new regulations unless Congress explicitly approves them.<\/p>\n

Khan answers by citing Congress\u2019 original intent for the FTC to ensure competition. \u201cIt\u2019s an authority that, especially in recent decades, hasn\u2019t been used as much, and I think that\u2019s a travesty,\u201d she says. \u201cWe as enforcers have an obligation to enforce the laws that Congress charged us with. I think we have pretty clear authority, pretty clear precedent. If we get legal challenges, we\u2019ll be prepared to fully defend ourselves.\u201d<\/p>\n

Khan\u2019s case against noncompete clauses is strong. But five and potentially six of the current Supreme Court justices aren\u2019t accustomed to bestowing air kisses on labor, big or small. Instead, they seem to take pleasure in directing sputum toward the faces of workers who\u00a0assert their rights<\/a>\u2014or\u00a0regulators<\/a> who want to extend those rights. If they strike down Khan\u2019s rule, she\u2019ll have as little power to restore it as those Prudential security guards who were trapped in their miserable jobs by noncompete clauses.<\/p>\n<\/div>\n

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Time Travel<\/p>\n

In November 1998, I wrote about the rise of Silicon Valley wannabes in a\u00a0Newsweek<\/em> cover story titled \u201cThe Hot New Tech Cities.\u201d As far as I can recall, noncompete clauses didn\u2019t factor into my thinking.<\/p>\n

How do you go about building a tech city? It\u2019s not easy. \u201cSilicon Valley is a set of networks and social relationships\u2014simply plopping down a science park isn\u2019t going to work,\u201d says AnnaLee Saxenian, a University of California, Berkeley, associate professor in city and regional planning. The main technique of aspirants is to reverse engineer Silicon Valley \u2026<\/em><\/p>\n

Whether they come from existing companies, a university or, in the case of Tel Aviv, the Army\u2019s Central Unit for Data Processing, smart new hires are like oxygen to high-tech firms. Only places with a rich talent pool can claim to be a tech city. Case in point: after years of bragging about how even a remote location like the so-called Silicon Prairie in North Sioux City, SD, could incubate a world-class computer manufacturer, Gateway threw up its hands and relocated its administrative headquarters to San Diego. \u201cWe simply exhausted the Sioux City workforce,\u201d explains vice president John Heubusch. On the other hand, once talent reaches critical mass, young fortune seekers flock there, secure in the knowledge that they can choose from a range of existing companies and hot startups.<\/em><\/p>\n

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Ask Me One Thing<\/p>\n

Lessa writes, \u201cAll hail the oral exam!\u201d and then ruminates about the long arc of civilization from the oral tradition to the written word and now digital communication generated by AI. \u201cHow do we frame all this?\u201d she asks.<\/p>\n

Thanks for the question, Lessa. Keeping to my New Year\u2019s resolution, I won\u2019t use your question as a prompt for a\u00a0ChatGPT<\/a>\u00a0answer. I do feel that AI-generated content is a huge deal. But I also think we need to get a grip, particularly regarding the fear that\u00a0large language models<\/a> are going to enable an\u00a0epidemic of cheating<\/a> by people who outsource graded work to these robots.<\/p>\n<\/div>\n

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Yes, some instructors may wind up orally quizzing students to make sure they have a grasp of material. I think that\u2019s a great idea regardless of the chatbot issues. One-on-one tests may be more time-consuming, but the real-time interplay between teacher and student might be an educational revelation in itself. So I second your hailing of that development.<\/p>\n

Still, I refuse to be alarmed that students might use LLMs to cheat on their work. Of course when it comes to earning credentials for jobs that affect safety\u2014doctors, architects,\u00a0plumbers, and such\u2014we may well have to proctor exams to make sure that unqualified fakers don\u2019t build our bridges or perform root canals. High school and college essays are another matter. The point isn\u2019t to win a grade but to train students to think logically, express themselves clearly, and make a linguistic connection with a reader. Students pay astronomical tuition fees to learn subject matter from professors. You\u2019d have to be a real idiot to miss out on learning those valuable skills by handing in the results of a prompt given to ChatGPT. Who\u2019s cheating who?<\/p>\n

You can submit questions to<\/em> ma**<\/span>@***<\/span>ed.com<\/span><\/em><\/a>. Write ASK LEVY<\/strong> in the subject line.<\/em><\/p>\n

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End Times Chronicle<\/p>\n

The 6-year-old kid who\u00a0shot his teacher<\/a>. I can\u2019t even.\u00a0<\/p>\n

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Last but Not Least<\/p>\n

The\u00a0results are in from CES<\/a>, from Afeela (Sony\u2019s new car) to the $100 hearing aid.\u00a0<\/p>\n

To the dismay of scientists, the latest version of Covid has\u00a0a \u201cscarient\u201d name<\/a>: the Kraken.\u00a0<\/p>\n<\/div>\n

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Iran is\u00a0using face recognition<\/a> technology to ID women who eschew hijabs.<\/p>\n

Are we finally\u00a0getting rid of the parking lot<\/a>? A world without them would be paradise.<\/p>\n

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Don’t miss future subscriber-only editions of this column.<\/em> Subscribe to WIRED (50% off for Plaintext readers)<\/strong><\/em><\/a> today.<\/em><\/p>\n<\/div>\n<\/div>\n

Read More<\/a>
\n Steven Levy<\/p>\n","protected":false},"excerpt":{"rendered":"

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