To the extent that it's difficult or impossible for the workers to get another job, the employer has buyer's market power (in the extreme, a monopsony). It's a

To the extent that it's difficult or impossible for the workers to get another job, the employer has buyer's market power (in the extreme, a monopsony). It's a well-recognized phenomenon in economics literature. https://www.investopedia.com/terms/m/monopsony.asp https://www.investopedia.com/terms/m/monopsony.asp https://en.wikipedia.org/wiki/Monopsony https://en.wikipedia.org/wiki/Monopsony Like a monopolistic market, a monopsonistic market is inefficient compared to a competitive one. Employers gain "utility" at the expense of workers, but less than the workers lose compared to a competitive market. Unions can remedy this by becoming a monopolistic (or near monopolistic) supplier of labour, by negotiating a higher wage (price floor), bringing the wage closer to it would be in a competitive market. Long story short: if you're pro competitive markets, you need to recognize the benefits of unions. They're not an ideal solution, but the alternative is not a competitive market outcome. Edit: this seems like a pretty good explanation: http://www.economicsonline.co.uk/Business_economics/Monopsony.html http://www.economicsonline.co.uk/Business_economics/Monopson...