🖤 Donations of all sizes power our public service journalism Give Now
To ban or not to ban
Apr 24, 2024
Episode 1146

To ban or not to ban

HTML EMBED:
COPY
The FTC is doing away with noncompete agreements, and Biden has signed the bill that may force TikTok out of the U.S.

Today, we’re talking about two different kinds of bans. As expected, President Joe Biden signed the TikTok sell-or-ban bill. But first, guest host Meghan McCarty Carino breaks down the Federal Trade Commission’s decision to ban noncompete agreements and their impact on workers and innovation. Plus, we’ll smile about Emily Dickinson and her newfound love of exclamation points!!! And how “old” is “old”?

Here’s everything we talked about today:

Want more Make Me Smart in your life? Sign up for our newsletter at marketplace.org/smarter.

Make Me Smart April 24, 2024 Transcript

Note: Marketplace podcasts are meant to be heard, with emphasis, tone and audio elements a transcript can’t capture. Transcripts are generated using a combination of automated software and human transcribers, and may contain errors. Please check the corresponding audio before quoting it.

Jay Siebold

Well, what do you say gang?

Kimberly Adams

Let’s do it.

Meghan McCarty Carino 

All right let’s do it.

Kimberly Adams 

Hey everyone, I’m Kimberly Adams. Welcome back to Make Me Smart, where we make today make sense.

Meghan McCarty Carino 

And I’m Meghan McCarty Carino. I’m here filling in for Kai Ryssdal. Thank you for joining us this Wednesday. It’s April 24.

Kimberly Adams 

Yes. And we are going to do some news today. We’re going to do some smiles. We’ll start with your news, Megan, what you got?

Meghan McCarty Carino 

All right. Well, I think we both have some kind of news today that has been a long time coming, sort of slowly and then all at once. So, I thought I would talk about the FTC finally voting to approve this ban on non-compete agreements that has been coming down the pike now for, I guess they proposed the rule in January 2023. They were taking comments they got, I believe, a boatload of comments. They got like 27,000 comments. And then yesterday afternoon, they voted three to two along party lines to approve this new rule. So, it bans all non-compete agreements, except in cases where executives have them with kind of the assumption that those may have been negotiated, you know, they might have gotten, you know, some sort of increased pay or something in exchange for a non-compete agreement, so those ones can stay in place. Executives making above a certain threshold, but all other non-compete agreements are void. And naturally, there have been some immediate legal challenges to this. A bunch of business groups led by the US Chamber of Commerce have filed challenges in federal court, saying that, you know, the FTC does not have the authority to make this kind of ban that affects businesses. You know, how they’re how they’re doing business across the country. The Wall Street Journal said, characterized it as this “measure approved by the agency’s Democratic majority on a three to two vote marks the first time in more than 50 years that the FTC has issued a regulation to mandate an economy wide change in how companies compete. The commission has historically operated like a law enforcement agency investigating and suing individual companies over practices or deals deemed to violate the law.” So yeah, that seems to be kind of the crux of these business groups’ argument is that, you know, this is an overstep of the FTC. Of course, firms that use non-compete agreements find it to be beneficial. And the kind of research that the FTC has leaned on has shown that one in five American workers have been under non-compete agreements, and definitely not just sort of high-level executives. A lot of low wage workers have, you know, have kind of been increasingly asked to sign non-compete agreements, and of course, asked in questioning.

Kimberly Adams 

Sign this or you don’t get hired.

Meghan McCarty Carino 

Exactly. Yeah. And in cases where you’re not an executive, you know, negotiating with lawyers behind you, and you know, a lot of power behind you. It’s pretty hard to say no. But in any case, I thought it was interesting to kind of look, you know, kind of past today’s news. Obviously, it was kind of expected that business groups, you know, have strongly opposed this and now they’re going to court over it. I was kind of looking into a piece of the kind of the business side of it that maybe is talked about a little bit less, which is there is a kind of pro-business argument for this in the tech world. And Bloomberg Law did a podcast last year where they talked about the kind of history in California and Silicon Valley and the role that basically a ban on non-compete agreements kind of played in the development of Silicon Valley. California has had basically like a ban on non-compete agreements since 1872. It has been you know, the judgment of courts in California that these are not enforceable. And it perhaps played a big role in kind of the, you know, the proliferation of a lot of different businesses at the dawn of the semiconductor age in Silicon Valley. They interviewed Margaret O’Mara, who’s one of my favorite sources. She’s a historian at the University of Washington who wrote a great history of Silicon Valley called “The Code.” And she talked about this company, Fairchild Semiconductor, which was founded in the 1950s by a group called the traitorous eight that left, you know, a competing semiconductor factory. And Fairchild became kind of this progenitor of a ton of different, you know, businesses that sprang off. And if you kind of work back through the family tree of a lot of, you know, today’s big tech companies, they kind of have their origins and, you know, people that were working at Fairchild. Anyway, it’s a super interesting podcast. Also, you know, read some editorial in the Harvard Business Review by some California law professors looking at this issue and saying that California and Massachusetts kind of are a natural experiment in looking at the effect of non competes on innovation and technology that sort of California pulled ahead, where Massachusetts where non competes were enforced maybe fell behind. So, just a little interesting side note there.

Kimberly Adams 

Yeah, it’ll be fascinating to see how these legal challenges stand up. Because you know, what you’re effectively talking about is private contracts. And given the leanings of the federal judiciary at the moment, I’m not exactly sure how much support Lina Khan is going to get for this effort. But you know, especially some of the examples they were talking about in rural areas, where, you know, hospital workers couldn’t get jobs elsewhere, and it was depressing wages or fast-food workers and things like that. There’s a lot of arguments that it can definitely make things harder for workers, and the innovation argument is one that is I think, less fleshed out. But it’s interesting to hear you laid out that way. Well, mine is I guess, very similar.

Meghan McCarty Carino

Adjacent.

Kimberly Adams

Adjacent in terms of competition, and then who gets to say what, especially when it comes to competition. As everyone will have heard by now, the President has signed into law this foreign aid package that includes the piece of legislation that would potentially ban TikTok. It will force the sale of the company, forced the Chinese parent company, to sell them off to a US company, or potentially face a ban in the United States. And it’s been interesting watching, you know, the backlash to this. It’s like, oh my gosh, it’s so awful. And how could the Biden administration do this, and all these TikTok creators are just like this is going to destroy us and TikTok is making the argument this is really unprecedented and unconstitutional. And I was reminded, and I can’t remember what brought it back to mind. But that, you know, we actually have a relatively recent example of something similar to this happening, which is that back in 2020, Grindr was, you know, in a similar situation. Grindr, which is an LGBTQ focused dating app was owned by a company in China, and CFIUS, the same security panel. The Committee on Foreign Investment in the United States, which reviews these kinds of arrangements and says whether or not their national security risk. CFIUS has said, hey, this is a national security threat. This is a lot of private user data that you know, China has access to, and this is really not a good thing. And CFIUS has basically pressured the company to sell Grindr, and Grindr was indeed sold. And, you know, everybody kind of just moved on. And granted, I doubt Grindr had lobbying strength. It certainly didn’t have the audience of TikTok. I think Grindr had something like, I’m looking at a TechCrunch article about it from 2020. Something like 27 million users at the time, which is, you know, very different than the upwards of 100 million, 150 million people who are using TikTok. And so when this goes to court, and I do say when not if, I have to imagine that this example is going to be brought up and people asking why is this any different? And also, you know, there’s a very direct comparison in that China does the same thing to a lot of US company tech companies, right? You can’t get on Facebook or Instagram and things like that easily in China because they don’t want their users to be interacting in such a meaningful way and sharing their data with companies owned by the United States. And then the Associated Press has this really interesting article about what happened when India banned TikTok. India at the time, and this was back in 2020. India had the second most users of TikTok after China. And so, you know, it happened then the government in India cited privacy concerns but had a very different reaction. So, here’s what the AP says. ‘New Delhi had suddenly banned the popular app, alongside dozens of other Chinese apps, following a military clash along the India-China border. Twenty Indian and four Chinese soldiers were killed, and ties between the two Asian giants plunged to a new low. The government cited privacy concerns and said that Chinese apps pose a threat to India’s sovereignty and security. The move mostly drew widespread support in India, where protesters had been calling for a boycott of Chinese goods.” And so, “How did users and creators react? At the time, India had about 200 million Tik Tok users. The company also employed thousands of Indians. And the band provided a multi-billion dollar opportunity to snatch up a big market. Within months,” and I’m quoting here, “Google rolled out YouTube Shorts and Instagram pushed out its Reels feature. Both mimic the short-form video creation that TikTok had excelled at. ‘And they ended up capturing most of the market that TikTok had vacated.’” And I think if this ends up going through, it’s going to be a pretty similar story here. And India’s an interesting case study of how quickly markets can adapt. You know, all the free speech arguments aside, I’m not even getting into it. But just from a business perspective, we’ve seen this before. Yeah.

Meghan McCarty Carino 

Right. I mean, on the free speech thing, of course, Montana tried to ban TikTok on a statewide level. And that was kind of the still working its way through the courts. But I think the initial injunction of that law was based on First Amendment protections and, you know, the concern that this is not, I guess, like a dating app, maybe is not sort of getting into as much of that hot water in terms of it being used for communication and speech. I mean, I don’t know. It’ll be super interesting to watch.

Kimberly Adams 

I’m sure the lawyers will hammer it out.

Meghan McCarty Carino 

Hash it out.

Kimberly Adams 

Anyway, let’s get into some smiles. Mine was definitely a “make me chuckle.” The headline here from the American Psychological Association has this in a press release. The headline is “People think ‘old age’ starts later than it used to, study finds.” “Middle-aged and older adults believe that old age begins later in life than their peers did decades ago, according to a study published by the American Psychological Association” They talk about how life expectancy has increased. So, that’s one thing, but also, you know, I think it’s people’s arrogance. So, here it says, “Life expectancy has increased, which might contribute to a later perceived onset of old age. Also, some aspects of health have improved over time, so the people of a certain age who were regarded as old in the past may no longer be considered old nowadays. However, the study, which was published in the journal Psychology and Aging, also found that the trend of later perceived old age has slowed in the past two decades.” And so, the specific breakdown is, you know, the question was “‘At what age would you describe someone as old?’ The researchers found that compared with the earliest-born participants, later-born participants reported a later perceived onset of old age. For example, when participants born in 1911 were 65 years old, they set the beginning of old age at 71. In contrast, participants born in 1956 said old age begins at 74, on average, when they were 65.” And so, you know, I think that it reminds me of this meme about Millennials not aging, and I was just talking to a friend of mine a couple weeks ago about how it was when we were kids, 40 was this big thing. You are over the hill. You’d have these big parties, black runes and tombstones and stuff. And it was considered to be like, Oh, my gosh, you’re officially old at 40. And, you know, I don’t think that it’s got that same vibe these days as someone who is 40.

Meghan McCarty Carino 

I mean, absolutely not, as someone else who is in their 40s.

Kimberly Adams 

Yeah, yeah. Yeah, 100% different. We’re not like them at all. But also, if I look at pictures, somebody was posting a picture of the cast of Cheers, for example, and the ages of everybody who was in Cheers, and how old they looked compared to people of that age nowadays, and I don’t think. It’s something about the way that we preserve ourselves, maybe because we don’t get in tanning beds, and we actually use sunscreen now.

Meghan McCarty Carino 

We have a lot more YouTube skincare videos now.

Kimberly Adams 

Yeah. I think that’s a lot more plastic surgery. Anyway. What’s your smile?

Meghan McCarty Carino 

All right. Well, I want to ask you first, what is your position on exclamation points in textual communications?

Kimberly Adams 

I think they’re fine. And I think that it sorts of lives in the same place in my mind as the complaints about women and vocal fry. It’s one of these things that is sort of used to minimize the authority of women even though it literally doesn’t matter. So, there we go.

Meghan McCarty Carino 

All right, I asked you because there’s a new book that is sort of seen as like the definitive letters of Emily Dickinson. And among many different details from these letters has been pulled the observation that in her letters, she used a lot of exclamation points. Of course, Emily Dickinson is sort of seen as the ultimate sad girl. You know, the kind of reckless, very serious doer. I think in recent years, there’s been a lot of revisionist scholarships of sort, you know, what she was actually like. But yeah, apparently, she was on team exclamation point with us. And I am extremely interested in this because I did one of my favorite stories ever, which has been lost to time. The week of February 24, 2020, was supposed to run on Marketplace. I did a story about sort of women’s specifically agonizing about how many exclamation points to use in their, you know, emails, and you know, just the kind of softening device versus wanting to be taken seriously. I talked to a woman who was using a kind of, she had built her own word processor that automatically removed exclamation points and other softening devices, so that she wouldn’t use them, and it never ran because of a little thing that happened at the end of February, so it never ran.

Kimberly Adams 

We should get that resurfaced.

Meghan McCarty Carino 

I know. I’ve tried to find it.

Kimberly Adams 

It was probably lost in the Great Purge.

Meghan McCarty Carino 

Yeah, exactly. Yeah, they just kept delaying it. They just kept delaying it, and now.

Kimberly Adams 

It was lost to time. Like so many other things. Well, I think that is it for us for time for today. But we are going to be back tomorrow with our audio show. Remember, if you have audio clips that you want us to talk about or discuss, which is effectively the same thing, but you know what I mean. Send your thoughts, questions, comments, or the audio that you think we should talk about to makemesmart@marketplace.org. Or leave us a voicemail at 508-U-B-SMART. Make Me Smart is produced by Courtney Bergsieker. Ellen Rolfes writes our newsletter. Today’s program was engineered by Jay Siebold. And Thalia Menchaca is our intern.

Meghan McCarty Carino 

Ben Tolliday and Daniel Ramirez composed our theme music. Our senior producer is Marissa Cabrera. Bridget Bodnar is the director of podcasts. Francesca Levy is the executive director of Digital. Go forth and exclamation point it up.

None of us is as smart as all of us.

No matter how bananapants your day is, “Make Me Smart” is here to help you through it all— 5 days a week.

It’s never just a one-way conversation. Your questions, reactions, and donations are a vital part of the show. And we’re grateful for every single one.

Donate any amount to become a Marketplace Investor and help make us smarter (and make us smile!) every day.

The team

Marissa Cabrera Senior Producer
Courtney Bergsieker Associate Producer