During the presentation, Bahn first discussed how the assumptions that underpin the view that markets are perfectly competitive are rarely met. Hosted by Equitable Growth on March 23, the briefing, part of a series dubbed “Econ 101,” introduced Hill staffers to labor markets under monopsony. Barriers that limit workers’ ability to move from job to job, incomplete or asymmetrical information about jobs, and discrimination are all factors that can give employers an upper hand when setting wages and, with it, the power to underpay workers. Kate Bahn, the director of labor market policy and chief economist at the Washington Center for Equitable Growth, defined monopsony in a briefing to congressional staffers last month: “Monopsony can be narrowly defined as any time there is one or few employers hiring workers, so they have considerable power to keep wages low since those workers do not have a lot of other options for jobs.”īut monopsony power, Bahn noted, is present not just when there are only a few employers in a particular labor market. In recent years, rising interest in the causes, consequences, and policy implications of imperfect competition has sparked a new wave of research on a framework known in economics as monopsony. In the case of the market for labor-a market that, it is worth noting, is fundamentally different from those where financial products or commodities are bought and sold-imperfect competition means that workers’ pay is solely determined neither by their productivity nor by the forces of supply and demand. Contrary to what many of us were taught in Introduction to Economics courses in college and graduate school, markets are rarely perfectly competitive.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |