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Sounds like a kind of monopoly to me! But this time on labor-employer relations. As usual, competition is necessary to encourage constant improvement. Without c
by vanilla_nut 4y ago
Sounds like a kind of monopoly to me! But this time on labor-employer relations. As usual, competition is necessary to encourage constant improvement. Without competition, workers have no way to "vote with their feet" and leave an abusive or incompetent union.
I wonder if any countries regulate these kinds of unions as the monopolies that they are?
- tomrod 4y agoYes! A chance to geek out on economics! A "monopoly" refers to supply side, when one supplier is (or practically is) the entire market supply. But on the demand side, the term is "monopsony." For example, the US Department of Defense is (probably) a monopsony for fighter pilots. The classic example is the company-owned coal town. Another term to remember is "regulatory capture." This usually refers to a government's regulators having their incentives captured by those they are intended to regulate. However, the incentive structures are more or less equivalent if an union is captured by a monopsony employer.
- trilbyglens 4y agoWould a union controlling companies' access to labor not be considered supply side?
- tomrod 4y agoYour intuition is going in the right direction. Workers, and worker aggregates in the form of unions or other entities, are the supply side for labor. They can be a monopoly (indeed, "better wages" and similar demands are expressions of market power). If there is only one demander (employer) for the labor, it would be a monopsony. Like a coal company in a company town.