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Monopsony may be holding down wages by allowing companies to price-set

By Feux Follets following x   2018 Mar 13, 4:53pm 466 views   13 comments   watch   sfw   quote     share    


Monopsony might just be the word of the year, at least for economics wonks.

The less-famous brother of monopoly, it means there are many sellers but only one buyer for a product.

That description fits a big chunk of the U.S. labor market right now, and it matters for wages: when companies face limited competition, they don’t have to up pay to “buy” work hours.

Antitrust enforcement focuses on protecting consumers, but it might be time to turn a critical eye on how concentration effects labor, based on a new paper.

Between 33 percent and 54 percent of local U.S. commuting-zone labor markets are highly concentrated, based on a study of data from Burning Glass Technologies, an analytics software company, by the University of Pennsylvania’s Ioana Marinescu and co-authors. If the authors use counties to define labor market, 74 percent are highly concentrated.

If a handful of employers dominate many labor markets, they may be able to set wages – rather than competing for workers against other firms, which could push them higher.

In fact, prior research has shown that greater concentration is associated with lower posted wages on online job boards.

“Given the observed level of concentration, company mergers have the potential to significantly increase employers’ labor market power,” they write. “The labor market concentration measure we develop here can be usefully leveraged in merger reviews.”

https://www.bloomberg.com/news/articles/2018-03-13/dominant-employers-may-be-choking-off-wages-eco-research-wrap

Related Article: Why Is It So Hard for Americans to Get a Decent Raise? A new answer could change how we think about unions, monopolies, and the minimum wage.

The paper—written by José Azar of IESE Business School at the University of Navarra, Ioana Marinescu of the University of Pennsylvania, and Marshall Steinbaum of the Roosevelt Institute—argues that, across different cities and different fields, hiring is concentrated among a relatively small number of businesses, which may have given managers the ability to keep wages lower than if there were more companies vying for talent.

This is not the same as saying there are simply too many job hunters chasing too few openings—the paper, which is still in an early draft form, is designed to rule out that possibility.

Instead, its authors argue that the labor market may be plagued by what economists call a monopsony problem, where a lack of competition among employers gives businesses outsize power over workers, including the ability to tamp down on pay.

If the researchers are right, it could have important implications for how we think about antitrust, unions, and the minimum wage.

More: https://slate.com/business/2018/01/a-new-theory-for-why-americans-cant-get-a-raise.html

#Economics #Monopsony #Wages

1   APOCALYPSEFUCKisShostikovitch   ignore (30)   2018 Mar 13, 5:27pm   ↑ like (1)   ↓ dislike (0)   quote        

The only solutions are:

TAX! CUT!

OUTLAWING! UNIONS!

REPEAL! of the 13TH! AMENDMENT!
2   Feux Follets   ignore (0)   2018 Mar 13, 5:29pm   ↑ like (1)   ↓ dislike (0)   quote        

There is a concentrated effort to crush even more unions and with it wages, benefits and everything else achieved over the years that even non union types enjoy courtesy of the unions.
3   Quigley   ignore (0)   2018 Mar 13, 5:40pm   ↑ like (1)   ↓ dislike (1)   quote        

Unions could fix this. My union, the International Association of Machinists and Aerospace Workers includes members of many professions including plane manufacturers, auto mechanics, miners, machinists, and aircraft mechanics as well as other professions. Our union negotiations produce higher pay and better benefits for the workers, which translates to better equipped consumers and more stable citizens who don’t need to rely on the government for their needs.

This hasn’t been much in vogue lately, as the Democrats seek to increase government dependence and decrease self-reliance among the working class.
4   APOCALYPSEFUCKisShostikovitch   ignore (30)   2018 Mar 13, 5:56pm   ↑ like (2)   ↓ dislike (0)   quote        

Unions were reclassified as terrorist organizations in 1981.

Trump will send the national guard to kill union organizers and take their wives as sex slaves, exactly as the Founding Fathers ordained.

Anything less is surrender to communism.
5   HEYYOU   ignore (13)   2018 Mar 13, 6:09pm   ↑ like (1)   ↓ dislike (0)   quote        

Paying 10% of any asking price is too much.
I'll take the item along with the asking price,in cash.
6   Quigley   ignore (0)   2018 Mar 13, 6:16pm   ↑ like (0)   ↓ dislike (2)   quote        

HEYYOU says
Paying 10% of any asking price is too much.
I'll take the item along with the asking price,in cash


Senility is a bitch!
7   Strategist   ignore (1)   2018 Mar 13, 8:39pm   ↑ like (1)   ↓ dislike (0)   quote        

Feux Follets says
Monopsony might just be the word of the year, at least for economics wonks.

The less-famous brother of monopoly, it means there are many sellers but only one buyer for a product.

That description fits a big chunk of the U.S. labor market right now, and it matters for wages: when companies face limited competition, they don’t have to up pay to “buy” work hours.


The best example of a monopsony is the American government buying military gear from a few companies like Lockheed and Boeing.
We have all heard of the ridiculous prices charged to the tax payer for a fucking toilet seat.
8   jazz_music   ignore (2)   2018 Mar 14, 9:42am   ↑ like (1)   ↓ dislike (0)   quote        

Monopsony is seen in military systems engineering market where millions of Americans seek work since all the other industries dried up in America. The buyers consolidated down to these prime contractors: Boeing, Lockheed-Martin, Northrop-Grumman, General Dynamics, Huntington Ingalls, BAE, Raytheon, GE, L-3, HP, United Technologies, Booz Allen Hamilton, Exelis, SAIC.

30 years ago there were orders of magnitude more buyers of labor.

These few massive conglomerates use their power to lobby heavily, bribing the government to relax existing visas and other foreign labor laws and create many new kinds of visas for foreign laborers to take jobs and lower wages.

The whole war industry has converted into all temp jobs. The few that remain between between major pushes are the youngest and the lowest paid and they set the stage for the next major 2-year thrust, which will be a bigger effort in scope during a GOP administration wherein the business world is like the wild west and robber barons rule the landscape.

Stocks rise. Pundits will say the economy is doing great even though at least 3.5 million PEOPLE THAT WORK are now essentially temps and earning less too. These were the best jobs that require a clean police record and security clearance.

The war industry is one example, all industries strive to achieve the same gains and low costs.

I've noticed that the core engineering softwares, that cost minimum $10,000 per seat per year, have been made unique to a certain contractor, or subset of contractors, which minimizes the portability of an engineer's value to the other contractors.
9   jazz_music   ignore (2)   2018 Mar 14, 9:43am   ↑ like (1)   ↓ dislike (0)   quote        

Quigley says
the Democrats seek to increase government dependence and decrease self-reliance among the working class.

Example?
10   jazz_music   ignore (2)   2018 Mar 14, 9:53am   ↑ like (2)   ↓ dislike (0)   quote        

The original union organizers were called Bolshevists and communists by the media to discredit and spread fear against them using the propaganda tools of the 1930s. They had hired thugs to disrupt any attempts to organize. Employee injuries, deaths and even murders were common. With those consequences the maritime union was formed, then the longshoremen, then the teamsters, then America began the change into greatness.

Propaganda tools are much better now, laws limiting propaganda have been overturned using unprincipled representatives, gaslighting and lying are the rule and not the exception today. People cry real tears for wealthy oligarchs who laugh their way to the bank, and the money disappears from the economy.

America gets poorer as a commonwealth. Lives get shorter. Hours get longer as jobs stability becomes a thing of the past.
11   drB6   ignore (1)   2018 Mar 14, 9:57am   ↑ like (1)   ↓ dislike (0)   quote        

APOCALYPSEFUCKisShostikovitch says
The only solutions are:

TAX! CUT!

OUTLAWING! UNIONS!

REPEAL! of the 13TH! AMENDMENT!

You forgot ARM! TODDLERS! WITH! MACHINE! GUNS! AND! BIBLE!
12   jazz_music   ignore (2)   2018 Mar 14, 10:08am   ↑ like (0)   ↓ dislike (0)   quote        

Looking back, the news media has always been corporatist, divisive, sensational to distract people from coalescing enough to form effective solutions to their shared problems.

Left unregulated, as they pretty much are nowadays the media exists to undermine democracy with circuses, and to sell junk food and cars.

Media fills the air with fluff and fears to keep us from talking about the things that could make a difference in our lives.

That's why the profiling and never the why.
13   TwoScoopsOfWompWomp   ignore (2)   2018 Mar 14, 10:12am   ↑ like (0)   ↓ dislike (0)   quote        

jazz_music says
Looking back, the news media has always been corporatist, divisive, sensational to distract people from coalescing enough to form effective solutions to their shared problems.


And it still is now.

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