Missing Minimum Monopsony Moods

Coase to Coase AM

Monopsony in labor markets is seems to be becoming a hotter topic year after year.  I can’t help but cynically think that some of its popularity is due to the fact that it can be used as a rationale for policies that are widely popular with the public, but less so with economists, like minimum wages, worker safety legislation, unemployment insurance, and legal protection for unions.  However, the reasons why monopsonies are a problem for economists don’t seem to be the reason why more politicized commentators oppose them.

A quick review on the economics: a monopsony is a lesser-known cousin of the monopoly, so lesser known that any economist discussing monopsony with noneconomists will hiss the “s” in monopsssssssssssssssony to emphasize the difference.  The difference here is that, in a monopsony market, there is only one buyer of the good in question, which, in this case, is labor.  The existence…

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About Jim Rose

Utopia - you are standing in it promotes a classical liberal view of the world and champion the mass flourishing of humanity through capitalism and the rule of law. The origin of the blog is explained in the first blog post at https://utopiayouarestandinginit.wordpress.com/2014/03/12/why-call-my-blog-utopia-you-are-standing-in-it/

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