In Labor Market Concentration, a new working paper from economists at U Penn, U Navarra and the Roosevelt Institute, researchers analyze a large US government data-set to determine how many workers live in markets where there is effective only one or two employers, a situation called “monoposony” (when a single buyer has a monopoly).
The researchers find that the majority of US workers live in these markets, where there is no competition for their labor; in these markets, wages are artificially suppressed because employers do not have to bid against each other for the same workers.
This is an important data-point in the ongoing debate about anti-trust and competition in capitalist economies. When the Chicago School economists gutted anti-trust enforcement in the USA, they did so on the basis that the only reason for governments to interfere in markets was when monopolists used their power to raise prices – but not when they colluded to sabotage new market entrants or suppress new products or services, and certainly not to prevent them from thwarting workers who wanted to get raises. The theory was that labor markets are “naturally competitive” and do not warrant consideration by regulators.
This is, in part, what the minimum wage is for. This is what OSHA is for. This is what the social safety net is for.
They are the counterbalancing force against issues and circumstances like this, where the basic theoretical dynamics of capitalism don’t work, either because they damage they would inflict on a society are too great or because the necessary prerequisites for capitalism to operate don’t exist.
If you live in an area where are no jobs, where you have no real competition among employers for labor, then you have no choice but to take the job offered, regardless of the health risks, the low pay, They are what keep people from having no other choice but to work for next-to-no pay in dangerous places with no benefits, because each individual needs a job but jobs don’t need each individual.
How about instead of your options being ‘work for the town business’ or ‘sit on the government’s charity,’ we add ‘start your own business?’ Labor markets are naturally competitive if you don’t saddle startups with onerous and laborious red tape to get up and running.
Labor markets are naturally competitive
Read the research.
Read it again.
And then read it a third time, because somehow you missed the fact that these markets aren’t competitive.
we add ‘start your own business?’
People do do that. Except multiple businesses need higher population densities (so that the market doesn’t become over-saturated). Which is why labor markets are more competitive where tere are more people. I.e. cities.
if you don’t saddle startups with onerous and laborious red tape to get up and running.
There actually isn’t that much red tape. Most regulations don’t kick in until you have between 5 and 15 employees. The big ones require you to have 25 or 50.
source: I work in HR in one of the most pro-labor states in the country.