What’s non-compete clauses and why is it a big deal that it’s banned?

Question

I see that the FTC banned it and (from what I see) it seems like a good thing. Why?

In: Economics

Answer 1

A non-compete clause limits an employees ability to find work with certain limitations such as duration of time and location. This only benefits the employer as it removes a person’s ability to find comparative work for better pay.

Not only that but it harms the economic interests of competing companies that are not even in direct contract as their potential hiring pool is smaller because of these non-compete clauses.

Basically it harms workers and competing companies only to the benefit of the one company which is worse overall economically.