We have to change the way we teach people (and the way we think) about labor markets.
bloomberg.com/view/articles/…
![](https://pbs.twimg.com/media/DaBhNBvU0AEgk1l.jpg)
![](https://pbs.twimg.com/media/DaBhhgOU0AErrrC.jpg)
But more fundamentally, it's part of a larger pattern of evidence.
Economist's basic, workhorse model of labor markets is failing, failing, failing.
![](https://pbs.twimg.com/media/DaBh4VJVMAANZJU.jpg)
But that wasn't *too* hard to deal with. Just invoke general equilibrium effects.
![](https://pbs.twimg.com/media/DaBiN3LUMAAq93-.jpg)
It sure looks like there's some MARKET POWER in effect.
![](https://pbs.twimg.com/media/DaBigGdU0AAqstI.jpg)
At least two new papers find direct, convincing evidence of market power in local labor markets. (shoutout to @mioana, @Econ_Marshall, and @joseazar here)
![](https://pbs.twimg.com/media/DaBi48XVwAYvK0Y.jpg)
nber.org/papers/w24307
![](https://pbs.twimg.com/media/DaBjKb5VAAEFMml.jpg)
Or, if you prefer, the supply-and-demand model is proving to be less useful than an oligopsony model in fitting the data on how labor markets work.
![](https://pbs.twimg.com/media/DaBjhlaUQAAFWdM.jpg)
Instead of supply-and-demand, we need to start with the monopsony model of labor markets.
Monopsony should be Econ 101 from now on.
(end)
![](https://pbs.twimg.com/media/DaBkAGRVMAE2Nfc.jpg)