In 2017, Idaho ranked as the number one most difficult place for employees to jump ship to a competitor. President Joe Biden just signed an executive order that could eliminate that dubious distinction.
The order would change or eliminate non-compete clauses in employment contacts, refusals by airlines to refund fees when luggage is lost, and penalties for cancelling internet services. These are among the 72 business practices included in the order.
Non-competes, often required to get a job in the first place, prevent people from taking new jobs similar to their old jobs. Non-competes were created to protect intellectual property, things like Apple’s newest product designs and the secret recipe for Coca-Cola. Now as many as 30 million people, including service workers, are controlled by non-competes.
In a conservative state like Idaho, fondness for such a limit on freedom seems out of character. After all, conservatism is synonymous with individual initiative in free market competition.
Instead, Idaho Association of Commerce and Industry President Alex LaBeau in 2017 described making it easier for employers to enforce non-compete agreements as, “companies protecting their assets in a competitive marketplace.” The quote, included in a New York Times article, is a remarkable example of irony.
In a nation where capitalism is king, corporations are consistent and effective opponents of government regulations. Government regulations, they argue, throttle their ability to do business. In other words, regulation is bad for businesses, but fine for employees.
To be fair, in a small isolated state where profits margins are thin, finding and keeping talent is a challenge. Competing in an online world leaves slim profits. Even so, the solution isn’t to shackle workers to their jobs or to hold customers hostage for more fees.
Freedom as an outcome of regulations seems counterintuitive. In a world in which industry consolidation has held down wages, tax incentives favor investment over work. Thus, the formation of new businesses has fallen in half since 1970, and regulations have become a necessity.
Last week’s Executive Order on Promoting Competition in the American Economy will give individuals more freedom to choose products and to act on their own behalf. Bose, the audio equipment company, has already responded to a part of the order that could end prescription requirements for hearing aids by announcing a new model priced below $1,000.
The executive order will require more than a dozen agencies to work out the details and commit to enforce the changes. Idahoans like all other American should hope they work fast.
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