Labor market monopsony

[See also: the generic monopsony case.]

Labor market monopsony

In virtually all industries and locations, there are far fewer employers than there are prospective employees.

In certain circumstances, there might be a single employer where a person can plausibly get hired (at least without changing fields or moving) - e.g. the market for doctors or nurses in towns with a single hospital, the market for retail services in areas where Walmart and other big box stores have driven out small competitors.

In the graph below, you can also vary the minimum wage (w_min) and the wage in a hypothetical public job guarantee program

The graph above allows us to make the following key points: