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Trump signals a shift on gun control; U.S. jobless claims near 45-year low as economic outlook brightens; Leading indicators beat expectations and post third straight month of gains in January.
Trump administration opens access to insurance outside Obamacare; Final TPP deal leaves out US rules; Business leaders confident in economy, but worried about the skills gap; Oil falls on US stockpiles.
A lack of competition among employers gives businesses outsize power over workers, including the ability to tamp down on pay.
In a new paper by Faculty Affiliate Ioana Marinescu, she argues that, across different cities and different fields, hiring is concentrated among a relatively small number of businesses, which may have given managers the ability to keep wages lower than if there were more companies vying for talent.
This could have important implications for how we think about antitrust, unions, and the minimum wage.
Are large corporate employers suppressing wages? A new paper co-authored by Faculty Affiliate Ioana Marinescu analyzes data from the website CareerBuilder.com, breaking down job postings by commuting zone and occupation. She finds that for occupations that have fewer employers posting on the website within a commuting zone, wages are lower than for occupations where lots of companies are looking for workers.
Results of a new study conducted by Faculty Affiliate Ioana Marinescu show that wages are actually higher in places where the concentration of employers is lower, even when correcting for the health of the local economy.
So the large companies in those labor markets are exercising a kind of monopoly power, except instead of using that power to raise prices on their products or services for consumers, they’re lowering wages for employees who have few other places to work.
Marinescu explains that the same thing happens in healthcare, when insurance companies say they’ll lower prices by squeezing doctors if allowed to get bigger through acquisitions.
“The argument for the merger would be: thanks to the merger, they were going to be able to get lower prices from medical providers, and that’s why the merger would benefit consumers,” she says. “It creates anti-competitive pressure in the labor market.”