NPR Topics: News | The hidden power keeping wages low by Greg Rosalsky

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The article explains how “monopsony” – the buyer‑side counterpart of monopoly – underlies low wages in today’s economy. Originating with Joan Robinson’s 1930s coinage of the term, the concept was long ignored by mainstream economics, which assumed perfectly competitive labor markets where employers had little wage‑setting power. New research, highlighted in Arindrajit Dube’s book *The Wage Standard*, shows that monopsony power is actually widespread, driven by market concentration, search frictions, and job differentiation, and that it allows employers to suppress pay, contributing to rising income inequality. The piece discusses how this insight has reshaped thinking about minimum‑wage policies, cites the work of David Card and Alan Krueger in overturning the notion that higher wages cause job loss, and outlines policy ideas – such as stronger collective bargaining, sector‑wide wage standards, and higher minimum wages – intended to curb employer power and raise workers’ wages.

Read more: https://www.npr.org/sections/planet-money/2026/04/21/g-s1-118071/the-hidden-power-keeping-wages-low

#JoanRobinson #ArindrajitDube #Fightfor$15 #US

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