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The U.S. economy may be booming, but despite a recent uptick wage growth remains stubbornly flat. Kate & Luigi examine the effect of monopsonies in the labor market among concentrated industries like Big Tech. Are companies colluding against workers and driving down wages?

This book explores the combination of capital's changing composition and labour's subjective agency to examine whether the waning days of the 'sweatshop' have indeed begun. Focused on the garment and footwear sectors, it introduces a universal logic that governs competition and reshapes the chain. By analysing workers' collective action at various sites of production, it observes how this internal logic plays out for labour who are testing the limits of the social order, stretching it until the seams show. By examining the most valorised parts of underdeveloped sectors, one can see where capital is going and how it is getting there. These findings contribute to ongoing efforts to establish workers' rights in sectors plagued by poverty and powerlessness, building fires and collapses. With this change and a capable labour movement, there's hope yet that workers may close the gap.

ABSTRACT*: This article emphasizes that the cooperative form of organization has an important role to play in developing the institutional variety in the market economy. Cooperatives are important tools for counteracting monopolies and monopsonies. Cooperatives may be analysed in terms of network organizations that enable weaker actors in the market to develop businesses that are beneficial both for themselves as users as well as for the larger national society. The development of new cooperatives is highly dependent on existing social networks in the local environment. Actors trying to promote the establishment of new cooperatives therefore have better chances of success if existing social networks are used as bases for the development of member‐owned businesses.

AbstractIt has often been claimed that the structure of export trade between Africa and Europe during the colonial period depended on the colonizer's identity, with the British relying on free trade and the French, in contrast, employing monopsonistic policies. However, due to the lack of systematic data on colonial trade, this claim has remained untested. This study uses recently available data on export prices from African colonies to estimate monopsonistic profit margins for British and French trading companies. The results challenge the view of the British colonizers as champions of free trade. The level of profit margins was determined much more by the local conditions in Africa (history of trade and the presence of European producers) than by the identity of the colonial power. The British did not necessarily rely on free trade more than the French and did so only when implementing monopsonies was not a viable option.

Der vorliegende Beitrag untersucht für den Fall eines sowie für den Fall zweier variabler Produktionsfaktoren, wie sich Mindestlöhne im nicht diskriminierenden Monopson auf Beschäftigung bzw. Kapitalintensität auswirken. Dabei kann der Mindestlohn in Höhe des hypothetischen Konkurrenzlohns oder in Höhe der Grenzkosten der Arbeit oder schließlich noch darüber liegen. Von besonderem Interesse ist die Situation mit zwei variablen Produktionsfaktoren: Es stellt sich eine nicht-lineare Budgetrestriktion ein und es können - neben der 'reinen Monopsonlösung' - drei weitere mögliche Betriebsoptima bestimmt werden. Alle vier Lösungen werden unter Verwendung einer Cobb-Douglas-Produktionsfunktion numerisch exakt bestimmt. Anschließend wird die theoretische Analyse noch verfeinert, indem eine CES-Produktionsfunktion unterstellt wird. Auch hier existiert eine exakte Lösung für das Monopson. In der Regel lassen sich aber die Lösungsbedingungen nur implizit und über geeignete Näherungsverfahren bestimmen. Es wird gezeigt, wie hoch ein Mindestlohn ausfallen muss, damit die vom Monopsonisten gewählte Kapitalintensität höher ausfällt als diejenige, die er im unreglementierten Monopson wählt. Schließlich wird in einer Sensitivitätsanalyse gezeigt, wie stark sich die Variation des Parameters μ aus der CES-Funktion auf die Optimallösung beim Monopson auswirkt. Für die wirtschaftspolitische Diskussion um das Für und Wider von Mindestlöhnen zeigt sich, dass Mindestlöhne tendenziell existierende Monopsone auf dem Arbeitsmarkt stabilisieren, dass für die Abschätzung der Beschäftigungseffekte von Mindestlöhnen keine Aussagen ohne Kenntnis der Substitutionselastizitäten möglich sind, und dass es von der Höhe des gewählten Mindestlohns letztlich abhängt, ob ein Monopsonist am Arbeitsmarkt seine bisherige Kapitalintensität beibehält, senkt oder sogar erhöht. Darüber hinaus wäre zu prüfen, ob die ins Feld geführten Beschäftigungsvorteile des Mindestlohns bei Vorliegen eines Monopsons sich nicht besser mit marktgerechten Instrumenten (Besteuerung des Monopsonisten und/oder Subventionierung des Arbeitsangebots) erreichen lassen. ; The paper develops the optimal solutions for the monopsony on the labor market, both for the short run (only labor is flexible) and for the long-run (capital is now flexible, too) with numerical examples based on earlier work of T. Barr (2005). It is shown that binding minimum wages of a certain degree push the monopsonist to choose a high capital intensity of production: just as high as or even higher than the one he chooses when he is not regulated by minimum wages. Thereby, we demonstrate the existing of re-switching effects in the tradition of Piero Sraffa. The second part of the paper generalizes the results achieved in the first part by making use of the quite general CES production function. The relationship between the elasticity of substitution on the one hand and likely levels of employment on the other hand - after introduction of minimum wages - is analyzed in a sensitivity analysis. Finally, we suggest a new valuation of minimum wages with regard to their stabilizing properties à-vis to monopsonies. We put forward a straightforward competition policy design which aims at fighting monopsonies instead of hoping for positive employment effects in the presence of minimum wages.

What happens if an employer cuts wages by one cent? Much of labor economics is built on the assumption that all the workers will quit immediately. Here, Alan Manning mounts a systematic challenge to the standard model of perfect competition. Monopsony in Motion stands apart by analyzing labor markets from the real-world perspective that employers have significant market (or monopsony) power over their workers. Arguing that this power derives from frictions in the labor market that make it time-consuming and costly for workers to change jobs, Manning re-examines much of labor economics based on this alternative and equally plausible assumption. The book addresses the theoretical implications of monopsony and presents a wealth of empirical evidence. Our understanding of the distribution of wages, unemployment, and human capital can all be improved by recognizing that employers have some monopsony power over their workers. Also considered are policy issues including the minimum wage, equal pay legislation, and caps on working hours. In a monopsonistic labor market, concludes Manning, the "free" market can no longer be sustained as an ideal and labor economists need to be more open-minded in their evaluation of labor market policies. Monopsony in Motion will represent for some a new fundamental text in the advanced study of labor economics, and for others, an invaluable alternative perspective that henceforth must be taken into account in any serious consideration of the subject.

Ob die Marktform des Monopsons am Arbeitsmarkt vorliegt, ist fur die Frage des Für oder Wider des Mindestlohns von essentieller Bedeutung. Denn in der kurzfristigen Analyse kann, insofern monopsonistische beziehungsweise oligopsonistische Strukturen am Arbeitsmarkt nachgewiesen werden, die Einführung eines Mindestlohns nicht nur zu einer exogenen Lohnerhöhung für die bisher angestellten Arbeitnehmer, sondern auch zu einem positiven Beschäftigungseffekt führen. Wählt man jedoch eine Modellierung jenseits einer kurzfristigen Betrachtung und nimmt fur die mittlere Frist den Faktor Kapital als variabel an, dann gilt fur den Unternehmer mit Marktmacht am Arbeitsmarkt genau dasselbe, was auch fur alle anderen Unternehmer ohne Marktmacht am Arbeitsmarkt gilt: Eine exogene Verteuerung des Faktors Arbeit - wie die Einfuhrung eines Mindestlohns - führt zu einer Substitution von Arbeit durch Kapital. Dieses Ergebnis scheint insbesondere vor dem Hintergrund der politischen Diskussion rund um den Mindestlohn und für die Einordnung der Ergebnisse des oft zitierten Beitrages von Card und Krueger (1994) von Bedeutung zu sein. ; The market forms of monopsony/oligopsony are about the only ones where the introduction of minimum wages goes along with an extension of employment, production and a likely decrease of prices. Thisfinding contrasts the bad outcomes of minimum wages predicted by the model of full competition in the labour market. However, these results were derived in literature with a short-run perspective, where the capital stock is assumed to be either constant or irrelevant. In this paper, we show in detail how these results are modified when capital is now variable and can serve considerably to substitute - if needed - labour. Hence, if capital intensity is significant and the elasticity of substitution between labour and capital is high - given a monsopsonistic firm vis-à-vis to the labour market -, a minimum wage will not cause so much positive employment effects as calculated under the short-run horizon. We also demonstrate the relevance of the rate of exploitation for the likely effects of the minimum wage on employment and capital intensity. Our results contribute to the discussion raised by the seminal paper of Card und Krueger (1994) and tend to shed a less optimistic light on monopsonies/oligopsonies in conjunction with minimum wages.