In December, @snaidunl came to JFI to present on an in-progress book with an unbeatable title (& an extra rare Norman Bethune reference in the third line):
"Terms of Service: Labor Market Power from American Slavery to Amazon Mechanical Turk."
a brief overdue summary thread/
"Terms of Service: Labor Market Power from American Slavery to Amazon Mechanical Turk."
a brief overdue summary thread/
He ran through a dense marathon of the (ever growing) monopsony evidence: in particular demonstrating the mounting evidence that quits are not very sensitive to mis-pricing of wages.
One implication of firm control over wages: they're between 50% to 20% below marginal product.
One implication of firm control over wages: they're between 50% to 20% below marginal product.
Among the evidence was new research on idiosyncrasies that contribute to employer power (& may inform strategies for countering it).
E.g. recent survey work with Walmart employees shows that a somewhat higher wage increases the chance they'll quit, less than a shorter commute.
E.g. recent survey work with Walmart employees shows that a somewhat higher wage increases the chance they'll quit, less than a shorter commute.
Another notable figure from this work: "workers would take 4x more commuting time to get a supervisor that respected them frequently."
Employers know that they can keep some # of workers who will labor under their potential market value—so long as you have labor markets, you're going to have monopsony.
Put another way: Laissez faire markets just produce monopsony.
Put another way: Laissez faire markets just produce monopsony.
Still another way:
"Markets for free labor have a universal characteristic—employer power over wages and employment—that distinguishes it from, say, the simple supply-and-demand logic of the market for carrots."
"Markets for free labor have a universal characteristic—employer power over wages and employment—that distinguishes it from, say, the simple supply-and-demand logic of the market for carrots."
.@snaidunl then took us to the first half of the subtitle: American slavery, which, he argues, represents a labor market without monopsony: "Slavery is the labor market that behaves like simple supply-and-demand diagrams of economics 101."
Running through the brutal history of labor markets from slavery to master-servant law to the gilded age gives continuity to the analytical tools necessary for examining labor markets in the present.
A subtle point that leads to policy prescriptions: monopsony gives unions room to raise wages without causing firing.
Unions cut precisely into the margins you’d want/expect an anti-monopsony force to cut into: increased labor share; lower top 10% share; lower wage inequality.
Unions cut precisely into the margins you’d want/expect an anti-monopsony force to cut into: increased labor share; lower top 10% share; lower wage inequality.
.@snaidunl’s major recommendation for social scientists:
"While we wait for mass mobilization, maybe we can work—J-PAL style—in improving what unions already do."
"While we wait for mass mobilization, maybe we can work—J-PAL style—in improving what unions already do."
For more, see documentation of a lecture @snaidunl gave on this material at @SCEPA_economics in the fall—slides and youtube link here: economicpolicyresearch.org/events/past-ev…
@snaidunl @SCEPA_economics To stay up to date with future research sessions at JFI, sign up for our newsletter here: jainfamilyinstitute.org/media/jfi-lett…
