Monopolies hurt consumers by increasing prices and decreasing choice. But since a balanced negotiation relies on workers being able to walk away from a raw deal, market power can hurt wages too. In a one-company town, employees are at the mercy of the employer. Even in a big city, workers may find that there are only a few companies that are a good match for their skills. When workers have fewer options, they are less likely to enjoy the wage gains that come from switching to a better employer.
In this talk Andrew Leigh analyses the extent and effects of ‘monopsony power’, drawing on new evidence from Australia and overseas.
Recorded 2nd March 2023 at Maurice Blackburn Lawyers, Melbourne Office.
Watch the recording below: