The Biden Administration has been pushing hard for credit for its significant economic successes. Coining the phrase ‘Bidenomics,’ the term is meant to direct attention towards the administration’s striking successful economic agenda. Under President Biden, the rate of inflation has been more than cut in half, employers have created more than 13 million jobs, wage growth has outpaced inflation, and the unemployment rate of Black workers is at a record-breaking, historic low. Now, the administration wants the public to give them credit.
Yet, the key to widespread public support is not through grandiose statements or flashy catchphrases. Instead, it is through the ongoing prioritization of policy that enhances the everyday, lived experiences of Americans—especially Black Americans. On this front, the FTC can play a crucial role.
The Federal Trade Commission is charged with protecting American consumers from everyday threats permeating the domestic marketplace. Appointed by President Biden, Lina Khan now serves as Chair of the Commission, and she has adopted a unique, ultra-progressive approach to the FTC’s mandate.
Soon after assuming leadership, Chair Khan de-prioritized the consumer welfare standard, a time-tested precedent that puts individual wellbeing at the forefront of any and all policy discussion, deeming it “too narrow.” Instead, the Commission has embraced a broad view of consumer well-being, focusing on antitrust cases that could theoretically have sweeping, long-term impacts on the economy. While I appreciate this approach, a loss of focus on the FTC’s bread-and-butter consumer protection issues could have a devastating impact on Americans’ economic wellbeing, especially those most vulnerable.
We have already witnessed the consequences of a loss of focus on fundamental issues at the FTC. As the Commission focused their energy on theoretical risks rather than real threats posed to consumers, consumer fraud cases soared. From 2021 to 2022, fraud losses increased by over 30%.
Last year, alone, consumers lost $8.8 billion to fraudsters—and Black Americans are disproportionately suffering from the consequences of this tragic phenomenon.
According to the FTC’s Serving Communities of Color report, “predominantly Black communities filed consumer reports at a higher rate than predominantly White or Latino communities.” Beyond that, Black and Latino individuals have reported higher instances of fraud via payment methods that do not have refundable protections. Without a solution from the FTC, they remain at a loss—exacerbating income inequality for consumers already working in traditionally marginalized communities.
Americans are increasingly turning to gig economy work to make up for losses to increasing fraud, to keep up with rapid inflation, or simply to gain extra spending money. In fact, Black and Hispanic individuals are most likely to take up gig-work, compromising over half of workers in the industry. Nearly one-third of Hispanic adults have earned money through the gig economy, while over a quarter of African American adults have earned money through these platforms.
Despite this trend, Lina Khan has now turned her attention to gig economy workers, with the commission vowing to “use its full authority” to investigate gig companies and worker practices. At an FTC Open Meeting, app-based workers warned the Commission against pursuing unnecessary legislation. Advocacy groups like the U.S. Hispanic Chamber of Commerce and National LGBT Chamber of Commerce called on the FTC to consider that these apps serve as a resource to members looking empower themselves through another income stream.
Yet their pleas went unconsidered, and Khan decided to release a policy statement giving the FTC the power to regulate the American labor market in the form of gig-worker regulation—despite the fact that opposing Commissioners claimed the decision “meanders in and out of our jurisdiction into matters of employment law.” Once again, Khan prioritized her own agenda despite what Americans were telling her they needed on the ground. In the name of individual American wellbeing, this trend cannot continue.
The Biden administration claims its goal is to “lower costs and help entrepreneurs and small businesses thrive.”
To achieve this, the FTC must recommit to its most fundamental pillar: the consumer welfare standard.
This commitment will especially benefit Black Americans, who have become innocent bystanders as foolhardy legislation renders them even more vulnerable at the hands of scammers.
When Americans feel the impact of thoughtful policy, they will be vocal in their support. From gig-economy workers to small business owners to high level corporate executives—every single American benefits from a vigorous FTC committed to protecting consumer interests. It’s time that the FTC recommit to the day to day needs of consumers, rather than distant, theoretical policy ideals that do nothing benefit lived experiences of Americans.
Dr. Julianne Malveaux is an economist, author, and higher education leader. Juliannemalveaux.com