Citing harm to workers and negative effects on competition, the Federal Trade Commission issued a new ruling that prohibits noncompete agreements.
NCAs impose contractual conditions on employees that prohibit them from taking a new job with a competing firm or starting a new business that could be viewed as competition. In 2022, Econ Quiz posed a question about NCAs. Today we are reviving that classic Econ Quiz.
Workers with higher levels of education and those in technical industries are more likely to labor under NCAs. About 26% of workers with a bachelor's degree, 19% of those with a master's degree, and 30% of those with a professional degree, worked under an NCA, as compared to 15% of those with a high school diploma. Those in occupations with higher wages were also more likely to work under an NCA, with 32% of those earning at least $45 an hour working under an NCA.
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Employees working in engineering (38%), computer/mathematical professions (36%), sales (28%), management (24%), and business and finance (23%) were the respondents most likely to report an NCA. In contrast, health care support (9%), food prep and serving (7%), education/training (7%), community and social services (4%), and legal (4%) were the least likely to report an NCA.
Question: What percentage of all workers had an NCA in 2017, the latest year for which analysis is available?
A) 18%
B) 25%
C) 5%
D) 42%
Answer: A. In 2017, an estimated 18.1% of all workers had an NCA. Men (20%) were more likely to have an NCA than women (15%).
— Kristin Runge; Kristin. runge@wisc.edu