Like a monopolist who has the power to raise prices without losing market share to cheaper rivals, employers facing little competition for workers can pay them less than their contribution to the bottom line without fear that a rival will swoop in to hire them away. … “I think the monopsony train is going out of the station way too fast,” [Distinguished Professor] David Neumark, an economist at the University of California, Irvine, who is skeptical of the value of the minimum wage, told me. He notes that companies in big markets where most people live and most workers work are not likely to wield much monopsony power. There are too many competitors also hiring.

For the full story, please visit https://www.bloomberg.com/opinion/articles/2022-08-09/minimum-wages-are-going-up-jobs-may-disappear.