June 21, 2024

Image for article titled Noncompete agreements don’t just hurt the workers who sign them

Image: William Potter (Shutterstock)

Noncompete agreements have been a hot topic this year. Wall Street likes them; workers don’t.

The contracts, also known as NCAs, restrict employees from working for a competitor in the event that they leave their job. Employers use them as a way to protect their trade secrets and other inside information from falling into the hands of their rivals. About one in five Americans are bound by them, most of them in salaried managerial and executive roles. Noncompetes been described scathingly by the Federal Trade Commission (FTC) as “a widespread and often exploitative practice that suppresses wages, hampers innovation, and blocks entrepreneurs from starting new businesses.”

And it’s not just the workers who sign these contracts that feel their impacts. A December study (pdf) conducted by the National Bureau of Economic Research found that states with stricter rules enforcing noncompete agreements were tied to a 1.7% reduction in earnings for all workers who lived there. The study also indicated that average annual earnings for US workers would rise anywhere between 3% and 14% if a nationwide ban on NCAs was enacted.

Why are noncompetes bad for workers?

NCAs are only as strong as their enforcement, which varies from state to state. The main reason they’re harmful to workers’ earnings is that there are typically fewer job openings in states with stricter laws, the study reported.

“Fewer job offers mean that workers have less ability to use improvements in outside options to negotiate for higher earnings and to climb the job ladder (that is, find better-paying jobs),” its authors wrote in their analysis.

The impacts are even stronger for women and people of color, who experience twice as much of a reduction in earnings compared to their white male counterparts.

“Strict enforceability [of NCAs] has an especially negative effect on the earnings of women and racial minorities and thus exacerbates existing disparities in the labor market.”

Moves to outlaw NCAs

Four US states—California, Minnesota, North Dakota, and Oklahoma—have banned noncompetes, and New York’s state legislature passed a bill earlier this year outlawing their use. The measure is awaiting the signature of Governor Kathy Hochul, who has until the end of the year to pass or veto it.

The FTC is also considering a proposed rule ending the use of NCAs.

Generadores de Monedas TikTok: ¿Vale la Pena Usarlos?
LivU Video Chat: Proven Strategies for Free Coins
Coin Master Free Spin Generator Risks: The Truth
Are TikTok Coin Generators Worth It?
L’impact des pièces gratuites sur TikTok : Expliqué
Elevate Your LivU Video Chat Adventure: Free Coins
Your Ticket to Village Domination: Free Spins in Coin Master
Avakin Life Avacoins Farming: Your Ultimate Guide
Bingo Blitz Credits Generator Review: Best Practices
Coin Master Spins Myths and Facts: Unraveled
genshin impact codes for free primogems mora in january 2023
A Deep Dive into ZEPETO Zems Generation
match masters applications sur google play
Get Free TikTok Coins: The Ultimate Guide
Unlocking Gems in Brawl Stars: Insider Techniques
pdf hack genera tor 2022 hack no human survey 6r8f 8y
pdf hack family island cheats gift codes family island free hack
hay day cheats android to get unlimited diamonds coins
litmatch make new friends apps on google play
cheat codes myths of moonrise for android and ios
pull him out yacht pin free download app for iphone ste primo
how to get unlimited gems in evony the king s return 2023
stake dice hack i know them well one of the players is beaten half
project makeover mod apk 2 56 1 unlimited coins gems download
how to get unlimited coins diamonds in beach buggy racing

Leave a Reply

Your email address will not be published. Required fields are marked *