![]() Increased concentration will suppress wages for all grocery store workers in affected cities-not only those workers currently employed by Kroger or Albertsons The merger will lower wages for 746,000 grocery store workers in over 50 metropolitan areas of the U.S.Our analysis uses grocery store employment and earnings data and the specific locations of Kroger and Albertsons stores. If the merger also leads to layoffs or hours cuts, this would add another dimension of damage to affected workers. ![]() Crucially, the wage effects we identify are solely driven by this increase in labor market concentration. By decreasing the number of outside options available to workers, the merger will limit competition for hiring and retaining employees, and grocery store worker earnings will fall as a result. Workers’ ability to negotiate better pay and working conditions rests on their capacity to switch jobs. We find that the merger of two of the largest supermarket chains in the country will increase employer concentration and reduce the wages of all grocery store workers in affected cities across the country. In this policy memo, we discuss these labor market implications of the proposed merger. However, a recent wave of economic research has called attention to potential damages to workers’ bargaining power over wages stemming from concentration in labor markets. 1 Historically, antitrust concerns have focused on the damage to consumers caused by concentration in product markets that gives large firms pricing power. ![]() In October 2022, Kroger, the largest supermarket chain in the U.S., announced plans to acquire Albertsons, the second largest, for $24.6 billion-a deal that faces antitrust scrutiny from the Federal Trade Commission and state regulators. What can be done about it: In their rulings on the admissibility of mergers, anti-trust regulators like the Federal Trade Commission should consider wage losses stemming from increased labor market concentration, as well as the typical product market effects. The deal will reduce the number of outside employment options available to workers, lowering grocery store workers’ annual wages by a total of $334 million-about a $450 loss in annual wages per worker. The problem: In October 2022, Kroger, the largest supermarket chain in the U.S., announced plans to acquire Albertsons, the second largest.
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