On March 4, New America’s Phil Longman and Barry C. Lynn explored why job growth has stalled in the United States over the last decade. The event was based on the cover story in the current issue of the Washington Monthly, in which Longman and Lynn point to corporate consolidation as the major factor in job growth stagnation, brought on by decades of weak antitrust enforcement in Washington. The event was moderated by Schwartz Fellow Paul Glastris, Editor in Chief of Washington Monthly.
Unemployment is the single greatest threat America now faces. Job growth, anemic before the recession, is now non-existent, and promises to be weak for years to come. Some blame foreign competition; others, a lack of investment. Industries from banking to retail to microchips are now so dominated by a few big firms that small businesses -- the source of most new jobs -- have less and less opportunity to thrive, expand, and challenge the behemoths. The result is a less innovative and dynamic economy. If this argument is right, then it's going to take a good deal more than tax breaks and stimulus spending to get America's jobs machine working again. It's going to require a federal government that will enforce the nation's antitrust laws, bring more competition back into markets, and unleash the creative energies of America's entrepreneurs.
Phil Longman pointed out that, remarkably, there were zero net jobs created in the last decade. Reviewing the various theories for this—bubble theory, globalization, regulation, and technology—he argued that none of them provides an adequate explanation. Rather, industry concentration and move toward monopolies is the major causal factor. In banking, healthcare, and food processing, he pointed out, consolidation has had negative effects. Barry Lynn offered a number of concrete examples of areas of consolidation, including eyewear, toothpaste, milk, beer, and vitamins. In system after system, he said, consolidation of industry has affected pricing, variety, quality, and safety. Innovation is harmed as well, he said, pointing out that in a list of twenty two rich nations, the United States now ranks second to last in the percentage of the population that owns its own business.