I'm wondering what folks think about this article. I'd never really thought about the labor market as a concentration of buyers' power in some sectors, but it makes a fair deal of sense to me. Mostly.
I'm 100% on board with the idea of "friction" suppressing pay, as employees are less likely to switch jobs the harder doing so becomes.
Some professions I get. Like, a schoolteacher can't just up & move districts whenever they want and the skills/education don't transfer well to many other careers. Others sorta confuse me. The example given at the end of the article is FedEx & UPS. On average, UPS pays much more than FedEx, which is attributed to some form of monopsony power FedEx has to keep their pay lower. I have no idea what that could be though. CDL drivers don't seem especially uncommon. Moving packages isn't a high skill job, even if it's a backbreaking one. Either one easily transfers to a lot of logistics jobs (truckers, warehousing, bus drivers, etc). I dunno.
Anyways, the article seems to present fighting back against this market failure with some combination of corrective factors (e.g., minimum wage), friction removal (e.g., removing barriers to the act of finding & getting a job), and public pressure campaigns (e.g., strikes or shame). I'm a little wary of outright corrections though and how political solutions tend to overshoot or undershoot their goals.
Thoughts?
Posted by InsuranceToTheRescue
1 Comment
The problem is that the hiring market has broken down, so the ability of labour market churn to act as a feedback mechanism to set wages has stalled. That’s a serious issue over the long term because it cements monopsony and leads to misaligned labour pools.