Re:The New Yorker has formed a union
by overton on Wednesday June 06, 2018 @01:42PM
(#17249276)
To the extent that it's difficult or impossible for the workers to get another job, the employer has buyer's market power (in the extreme, a monopsony). It's a well-recognized phenomenon in economics literature.
Like a monopolistic market, a monopsonistic market is inefficient compared to a competitive one. Employers gain "utility" at the expense of workers, but less than the workers lose compared to a competitive market.
Unions can remedy this by becoming a monopolistic (or near monopolistic) supplier of labour, by negotiating a higher wage (price floor), bringing the wage closer to it would be in a competitive market.
Long story short: if you're pro competitive markets, you need to recognize the benefits of unions. They're not an ideal solution, but the alternative is not a competitive market outcome.
https://www.investopedia.com/terms/m/monopsony.asp https://en.wikipedia.org/wiki/Monopsony
Like a monopolistic market, a monopsonistic market is inefficient compared to a competitive one. Employers gain "utility" at the expense of workers, but less than the workers lose compared to a competitive market.
Unions can remedy this by becoming a monopolistic (or near monopolistic) supplier of labour, by negotiating a higher wage (price floor), bringing the wage closer to it would be in a competitive market.
Long story short: if you're pro competitive markets, you need to recognize the benefits of unions. They're not an ideal solution, but the alternative is not a competitive market outcome.
Edit: this seems like a pretty good explanation: http://www.economicsonline.co.uk/Business_economics/Monopson...