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posted by martyb on Friday January 19 2018, @12:06PM   Printer-friendly
from the Invisible-hand dept.

Found this interesting, you may too.

A new research paper that may help unlock the mystery of why Americans can't seem to get a decent raise. Economists have struggled over that question for years now, as wage growth has stagnated and more of the nation's income has shifted from the pockets of workers into the bank accounts of business owners. Since 1979, inflation-adjusted hourly pay is up just 3.41 percent for the middle 20 percent of Americans while labor's overall share of national income has declined sharply since the early 2000s. There are lots of possible explanations for why this is, from long-term factors like the rise of automation and decline of organized labor, to short-term ones, such as the lingering weakness in the job market left over from the great recession. But a recent study by a group of labor economists introduces an interesting theory into the mix: Workers' pay may be lagging because the U.S. is suffering from a shortage of employers.

[...] argues that, across different cities and different fields, hiring is concentrated among a relatively small number of businesses, which may have given managers the ability to keep wages lower than if there were more companies vying for talent. This is not the same as saying there are simply too many job hunters chasing too few openings—the paper, which is still in an early draft form, is designed to rule out that possibility. Instead, its authors argue that the labor market may be plagued by what economists call a monopsony problem, where a lack of competition among employers gives businesses outsize power over workers, including the ability to tamp down on pay. If the researchers are right, it could have important implications for how we think about antitrust, unions, and the minimum wage.

Monopsony is essentially monopoly's quieter, less appreciated twin sibling. A monopolist can fix prices because it's the only seller in the market. The one hospital in a sprawling rural county can charge insurers whatever it likes for emergency room services, for instance, because patients can't go elsewhere. A monopsonist, on the other hand, can pay whatever it likes for labor or supplies, because it's the only company buying or hiring. That remote hospital I just mentioned? It can probably get away with lowballing its nurses on salary, because nobody is out there trying to poach them.

[...] Harvard University labor economist Lawrence Katz told me that he suspected the findings about market concentration and wages were directionally correct but that they may be a bit "overstated," because it's simply hard to control for the health of the labor market.

"They are getting at what is an important and underexplored topic ... using a creative approach of using really rich data," he said. "I don't know if I would take perfectly seriously the exact quantitative estimates."

Still, even if the study is only gesturing in the direction of a real problem, it's a deeply worrisome one. We're living in an era of industry consolidation. That's not going away in the foreseeable future. And workers can't ask for fair pay if there aren't enough businesses out there competing to hire.

Article summarizing study:
Why Is It So Hard for Americans to Get a Decent Raise?

Actual study (limited access): http://www.nber.org/papers/w24147

FYI: Number of companies on America's stock exchanges has decreased by 50% since 1998


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  • (Score: 1, Interesting) by Anonymous Coward on Friday January 19 2018, @03:09PM (14 children)

    by Anonymous Coward on Friday January 19 2018, @03:09PM (#624700)

    > RAM truck factory coming back from Mexico

    Sure, a short term win for the old Warren plant. But Chrysler is going to be taken apart and sold piecemeal in the near future. Who knows where the new owner(s) will move production. One thing for sure, any profits will not be coming to USA, FCA is Italian owned and the new owners of Jeep and/or RAM will not be Ford or GM.

    Also, there are no layoffs in Mexico, those plants will keep right on humming with a different product mix. In response to possible increased tariffs for vehicles entering the USA, the trucks made in the Mexican plants will be shipped to other markets, likely S. America.

    Starting Score:    0  points
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  • (Score: 2) by GreatAuntAnesthesia on Friday January 19 2018, @03:52PM (13 children)

    by GreatAuntAnesthesia (3275) on Friday January 19 2018, @03:52PM (#624731) Journal

    Dude, look who you are arguing with: This guy has been channelling Donald Trump on this forum for months either because (a) performance art (b) he really believes he's Trump (c) some kind of advanced new trolling technique too subtle for my ken (d) he's practising for a real life career as an orange turd impersonating.

    Any which way, he copies Don very well. That means any reasoned, logical arguments you present are going to get farted away by irrelevant, truthless twatter. You are wasting your pixels.

    • (Score: 0) by Anonymous Coward on Friday January 19 2018, @04:19PM (6 children)

      by Anonymous Coward on Friday January 19 2018, @04:19PM (#624756)

      > This guy ...
      Wouldn't you be surprised if the fake-Trump was female...?

      • (Score: 3, Informative) by GreatAuntAnesthesia on Friday January 19 2018, @04:23PM (5 children)

        by GreatAuntAnesthesia (3275) on Friday January 19 2018, @04:23PM (#624758) Journal

        No, not really. I was just using the masculine as a shorthand for "this unknown person of indeterminate gender".

        • (Score: 3, Informative) by realDonaldTrump on Friday January 19 2018, @08:22PM

          by realDonaldTrump (6614) on Friday January 19 2018, @08:22PM (#624878) Homepage Journal

          I guarantee you there’s no problem there. I have four beautiful children: Barron, Ivanka, Donald Jr. and Eric. And Tiffany.

        • (Score: 1, Insightful) by Anonymous Coward on Friday January 19 2018, @08:51PM (3 children)

          by Anonymous Coward on Friday January 19 2018, @08:51PM (#624893)

          I've taken to saying "they" which is a little imprecise when talking about a single person, but is common enough that I feel comfortable using it for genderless discussions.

          • (Score: 0) by Anonymous Coward on Friday January 19 2018, @09:47PM (2 children)

            by Anonymous Coward on Friday January 19 2018, @09:47PM (#624933)

            I says dude in like the dude has a nice dress and the other dude a nice pickup dude !!

            • (Score: 0) by Anonymous Coward on Friday January 19 2018, @10:12PM (1 child)

              by Anonymous Coward on Friday January 19 2018, @10:12PM (#624954)

              How does it feel being uncomfortable with reality 24/7? Do you get urges to hit random people? Are bar fights something you consider "normal"?

              • (Score: 1, Funny) by Anonymous Coward on Saturday January 20 2018, @01:27AM

                by Anonymous Coward on Saturday January 20 2018, @01:27AM (#624999)

                Duuude, why the hate dude?

    • (Score: 3, Interesting) by All Your Lawn Are Belong To Us on Friday January 19 2018, @08:50PM (4 children)

      by All Your Lawn Are Belong To Us (6553) on Friday January 19 2018, @08:50PM (#624892) Journal

      Or.... he's real. :O :O

      No, I don't really believe that, but it is an alternative.

      --
      This sig for rent.
      • (Score: 2) by Azuma Hazuki on Friday January 19 2018, @09:23PM (3 children)

        by Azuma Hazuki (5086) on Friday January 19 2018, @09:23PM (#624913) Journal

        There is no way in Hell that is the real Trump. Much too coherent, for one thing. The real deal doesn't speak at such a high vocabulary level either. It's a very good attempt, and darkly amusing to read, but it can't possibly be him.

        --
        I am "that girl" your mother warned you about...
        • (Score: 3, Insightful) by GreatAuntAnesthesia on Saturday January 20 2018, @01:57AM (2 children)

          by GreatAuntAnesthesia (3275) on Saturday January 20 2018, @01:57AM (#625004) Journal

          You're almost certainly right. But you know what? Just in case... just on the one in a billion chance that we are in fact blessed by the presence of the Pussygrabber-in-chief himself, I'm going to leave this here.

          DONALD TRUMP DONALD TRUMP DONALD TRUMP DONALD TRUMP DONALD TRUMP 1

          Donald, if you're reading, I wrote this specially for you:

          Hey Don!

          Your wife won't touch you,
          Your kids are just using you,
          Your party barely tolerates you,
          Your country is ashamed of you,
          The world thinks you're a joke.

          And all your wealth and power,
          So cruelly won,
          offers you less comfort than a two dollar cheeseburger.

          Tell me Don,
          Does it feel like winning yet?

          DONALD TRUMP DONALD TRUMP DONALD TRUMP DONALD TRUMP DONALD TRUMP

          1 Apparently he rarely reads anything unless he sees his own name written prominently all over it.

          • (Score: 2) by realDonaldTrump on Saturday January 20 2018, @04:46AM (1 child)

            by realDonaldTrump (6614) on Saturday January 20 2018, @04:46AM (#625041) Homepage Journal

            Are you tired of winning yet? Brexit is going beautifully, the pound is at RECORD LEVELS, @BorisJohnson [twitter.com] is building that beautiful bridge to France, my nuclear guys are working on baby nukes for your Trident missiles. To go into your missiles. Very soon. And if you call your stock broker, I think he'll have some very nice news for you. But it sounds like you're getting tired of winning. Like it's too much winning for you. I’m sorry, but we’re going to keep winning, winning, WINNING. Except in the last election, not a great one for UKIP. Let me tell you, Nigel is a terrific guy. He shouldn't have quit. I love him to death, but it was the wrong time. They lost very badly. But they also WON. Because they made Brexit happen. And it's going much better than anyone expected. Believe me, UKIP can come back. If the Tories break their promises, if you need to TAKE BACK YOUR COUNTRY just like we're doing in the USA, you'll bring back UKIP in a big way. I always say, never give up. I turned my biggest challenges into success.

            Let me tell you, the Japs make a mean cheeseburger. They made me one with Colby Jack, it only cost $11. 🍔 When I had lunch with @AbeShinzo [twitter.com]. It was delicious. Better than sex. The best part, there's no tipping in Japan. pic.twitter.com/9RiaibqNLO [t.co] 🇯🇵

    • (Score: 0) by Anonymous Coward on Friday January 19 2018, @09:12PM

      by Anonymous Coward on Friday January 19 2018, @09:12PM (#624904)

      You forgot:
      (e) obsessed with writing first-person fan fiction.