LABOR MARKET MONOPSONY: TRENDS, CONSEQUENCES, AND POLICY RESPONSES (October 2016) [pdf]
….a firm with monopsony power has the ability to pay lower prices for its inputs (i.e. what it buys). In the important case of labor markets, a monopsonistic employer can pay a lower wage than would prevail in a competitive market without losing all its workers to competing employers. Like monopoly power, monopsony generally leads to economic inefficiency. And in the labor market, it also leads to redistribution from workers to employers.
… when there are barriers that limit wage competition between firms, market discipline that compels employers to pay the going wage is weakened. In this case, assuming that similarly productive individuals vary in their “reservation wages” (the lowest wage they are willing to accept)—for example, because some must commute from longer distances—a monopsonistic firm faces a choice: it can set the wage high enough to recruit even those with high reservation wages, or it can limit employment to those who are willing to work for less and thereby keep wages low. Economic theory shows that firms with monopsony power have an incentive to employ fewer workers at a lower wage than they would in a competitive labor market. What the monopsonistic firm loses in reduced output and revenue, it more than makes up in reduced costs by paying lower wages. In other words, by recruiting less aggressively, paying less, and sacrificing some employment, employers with monopsony power can shift some of the benefits of production from wages to profits…
Yesterday at the Missouri Ethics Commission for the campaign to promote “right to get paid less”:
C171367 03/28/2018 Freedom To Work Airport Investment Co Inc. 755 S New Ballas Rd Suite 150 St Louis MO 63141 3/27/2018 $10,000.00
Gee, that doesn’t seem like much in comparison. Before yesterday:
C171367 01/05/2018 Freedom To Work A New Missouri Inc. 105 E High St Jefferson City MO 65101 1/3/2018 $750,000.00
C171367 01/06/2018 Freedom To Work New Prime Inc. 2740 N Mayfair Ave Springfield MO 65803 1/5/2018 $10,000.00
C171367 02/01/2018 Freedom To Work A New Missouri Inc. 105 E High Street Jefferson City MO 65101 1/31/2018 $400,000.00
C171367 02/01/2018 Freedom To Work Jennifer Pritzker 104 S Michigan Ave Ste 500 Chicago IL 60603 Tawani Enterprises Inc President/CEO 1/30/2018 $25,000.00
C171367 02/20/2018 Freedom To Work Richard Uihlein 1396 N Waukegan Rd Lake Forest IL 60045 Uline Inc CEO/Chairman 2/20/2018 $500,000.00
$10,000.00 seems so quaint these days.
Campaign Finance: Freedom to Work? (December 21, 2017)
Campaign Finance: they left “…for lower pay” off their committee name (February 1, 2018)
Campaign Finance: connections (February 20, 2018)