Why we need to do something about the monopsony power of employers
Monopsony decreases worker mobility, keeping wages lower than they would be in a competitive market, writes Alan Manning
You have almost certainly heard of monopoly, but less likely to have heard of monopsony. The literal definition of monopoly is a situation where there is only one seller of a product; though the term is used more loosely to refer to the case where there are a few sellers and not much competition between them. They have what is called 'market power' -some ability to set their own prices. The consequence of monopoly is that prices are higher than they would be in a competitive market. Monopsony refers to the same idea but for employers; the consequence is that wages are lower than they would be in a competitive market.
26 August 2020
LSE Business Review
https://blogs.lse.ac.uk/businessreview/2020/08/26/why-we-need-to-do-something-about-the-monopsony-power-of-employers/
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