A Nobel Prize-winning economist says 'non-competes' are keeping wages down for all workers

Sir Angus Deaton won the Nobel Memorial Prize in Economic Sciences in 2015 for his analysis of consumption, poverty, and welfare. He is the author of many books on consumption and inequality, most recently "The Great Escape: Health, Wealth, and the Origins of Inequality." Deaton sat down with Business Insider's Sara Silverstein at UBS's Nobel Perspectives Live event in Brooklyn. He says low income workers are being asked to sign non-competes, which is limiting their options and forcing them to accept wages that aren't competitive. Following is a transcript of the video.

Sir Angus Deaton: Another issue that's going on all the time is ... you know, non-compete agreements. So, a lot of people sign a non-compete agreement and when most people think of it, if you think of it, you probably think of someone in a hedge fund or something.

Sara Silverstein: Well I did work at a hedge fund. I did sign a non-compete, but my lawyer told me not to worry about it, because they're not enforceable.

Deaton: Well they're not enforceable in some states. But, now fast food workers are signing non-competes, and something like 56% of franchises like H&R Block, Jiffy Lube, McDonalds and so on are asking their workers to sign non-competes of one sort or another. That's probably illegal, but what chance your lawyer advises you not to sign this?

How many hamburger flippers have lawyers? How many lawyers would take a case from a hamburger flipper? So, this is sort of intimidation, and again people are saying, "Well, that's illegal, you know, we shouldn't be able to do this." And there was one of them involving a sandwich-making chain, I've forgotten what it was called, and it had a very vicious one. I mean, that you couldn't work for any other sandwich manufacturer within four miles of their franchise, which ruled out the whole city of Chicago, for instance. And so, you know, these things help keep wages down.