One possible reason is that employers are growing increasingly powerful. Recent research by economists José Azar, Ioana Marinescu and Marshall Steinbaum has found that rising concentration in labor markets -- a decrease in the number of employers competing for workers -- has led to suppression of wages. Another new paper by Efraim Benmelech, Nittai Bergman and Hyunseob Kim reached the same conclusion.
Economic theory says that when there are only a few employers, the supply-and-demand model breaks down, and powerful companies start holding wages below what a competitive market would provide. This theory also predicts that minimum wage laws wouldn’t throw people out of work -- exactly what many researchers are now finding.
Absolutely. Look at what has been happening in all industries for the past 20 years, consolidation. It doesn't matter which one you look at, newspapers, retail, any kind of food producers, right down to farming, and of course now social media, all are owned by fewer and fewer players. And the government is complicit in this, especially banking, which I consider the most insidious.
Absolutely. Look at what has been happening in all industries for the past 20 years, consolidation. It doesn't matter which one you look at, newspapers, retail, any kind of food producers, right down to farming, and of course now social media, all are owned by fewer and fewer players. And the government is complicit in this, especially banking, which I consider the most insidious.