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Monopsony as a metaphor for the emerging post‐union labour market
Author(s) -
ERICKSON Christopher L.,
MITCHELL Daniel J.B.
Publication year - 2007
Publication title -
international labour review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.433
H-Index - 46
eISSN - 1564-913X
pISSN - 0020-7780
DOI - 10.1111/j.1564-913x.2007.00012.x
Subject(s) - monopsony , economics , labour economics , bargaining power , wage , competition (biology) , matching (statistics) , globalization , market power , power (physics) , collective bargaining , market economy , microeconomics , ecology , monopoly , statistics , physics , mathematics , quantum mechanics , biology
How can employers worldwide be experiencing increasingly severe labour shortages in the face of globalization? Why don't wages rise in expanding economies? This article argues that declining union power has allowed employers to take the upper hand, setting pay and other conditions of employment as they would in a monopsonistic labour market. Rejecting the perfect competition model matching supply to demand, the authors argue that, far from being a pedagogical curiosity, monopsony's imbalance in bargaining power is widespread. Employee voice needs to be restored to counter the undesirable consequences of strong macroeconomic performance, such as wage inequality and reduced worker rights.