New Executive Order Promotes Competition and Innovation in 7 Areas of the Economy
President Biden’s Executive Order on Promoting Competition in the American Economy establishes a government-wide effort to solve the most pressing issues that the American economy faces. From transportation to healthcare, the order will likely impact every industry.
Read on for more details on the latest executive order and how it will impact employers.
What is the New Executive Order?
President Biden issued the Executive Order on Promoting Competition in the American Economy on July 9, 2021, to combat lack of competition and promote economic growth in the US. The order focuses on seven industries, including healthcare, transportation, technology, and more, and includes 72 initiatives across federal agencies.
According to the White House, the legislation seeks to “lower prices for families, increase wages for workers, and promote innovation and even faster economic growth.”
Which Industries Will the Executive Order Impact?The order will have an impact on seven industries:
1. Labor Markets
This section of the executive order focuses on competition in the labor arenas. For example, it emphasizes banning and limiting non-compete agreements, eliminating unnecessary occupational licensing restrictions, and strengthening antitrust guidance.
According to the White House, this will work to prevent employers from collaborating to suppress wages or reduce benefits by sharing wage and benefit information with one another.
Additionally, this action further supports union-friendly changes such as the PRO Act, which impacts workers’ ability to organize and employment law surrounding unions.
There are four areas related to healthcare that President Biden hopes to focus on to increase access to high-quality, affordable care. Those areas include prescription drugs, hearing aids, hospitals, and health insurance.
Per the White House, Americans pay more than 2.5 times the cost for the same prescription drugs as peer countries—sometimes more. Likewise, lack of competition among hearing aid manufacturers and unnecessary red tape keeps essential medical devices like hearing aid prices so high that many Americans can’t afford them.
Biden plans to address other components of healthcare policy. This includes revising guidelines for hospital mergers that leave rural communities without access to care, promoting hospital price transparency like the new No Surprises Act, and standardizing Marketplace plan options.
In the transportation industry, large corporations have a monopoly on airlines, rail transportation, and shipping.
According to the order, President Biden plans to encourage the Department of Transportation (DOT) to issue clear rules for airline policies, like requiring the refund of fees when baggage is delayed or clearing stating rules for things like cancellation fees or extra baggage fees.
According to the White House, the markets for seeds, equipment, feed, and fertilizer are dominated by just a few large companies, which increases the prices for family farmers and ranchers.
Additionally, large corporations who control equipment manufacturing keep farmers from being able to do their own repairs or use independent repair shops.
5. Internet Service
The executive order addresses four problem areas related to internet service. This includes lack of competition among broadband providers, lack of price transparency, high termination fees, and discriminatory practices by broadband companies who block or slow down online services.
In regards to technology, the order will discourage big tech firms from gathering too much personal information from consumers and purchasing competition.
7. Banking and Finance
According to the White House, the US has lost 70% of the banks it once had over the past four decades, largely due to mergers and acquisitions. This results in increased costs for customers and restricts credit for small businesses.
In response, the White House plans to encourage the Department of Justice, the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency to "update guidelines on banking mergers to provide more robust scrutiny of mergers."
How Does the Executive Order Impact Employers?
Employers should continue to expect the current presidential administration and Congress to prioritize measures that strengthen competition and workers' rights in the coming years.
According to NPR, Biden's newly confirmed Federal Trade Commission Chair Lina Khan has argued in favor of federal rules targeting anti-competitive practices including noncompetes.
President Joe Biden also issued an executive order in spring 2021 to increase the hourly minimum wage to $15 for federal contract workers. According to the order, this change “enhances worker productivity and generates higher-quality work by boosting workers’ health, morale, and effort; reducing absenteeism and turnover; and lowering supervisory and training costs.”
Additionally, recent reports indicate that a group of Congress members want to step in and replenish the Restaurant Revitalization Fund grant program to help struggling restaurants. Employers should stay on top of all the latest updates regarding the RRF and other COVID-19-related legislation that may pass in the coming weeks and months.
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