Over decades, employers have built and maintained a massive collective political apparatus to hold down wages. To call it a conspiracy would be only slight embellishment. According to research by the Economic Policy Institute, from the early 1970s to 2016 productivity went up 73.7%, and wages only 12.3%.
The Federal Reserve just announced that it’s taking the next step in its plan to raise interest rates. This will suppress wages to prevent inflation, although inflation is minuscule and wages aren’t showing signs of life.
Monopoly occurs when sellers are so concentrated that they don’t really have to compete. Monopsony is when the buyers – in this case, employers – are concentrated. A recent paper from the Roosevelt Institute found that the average level of concentration in labor markets is 45% higher than the threshold for “highly concentrated” markets used by antitrust regulators. If the government went after employer monopsony the way it does other kinds of markets, regulators might have their hands quite full.
Alan Krueger and Eric Posner pointed out in the New York Times recently, one in five workers with a high school degree or less is subject to a non-compete clause – a tool for employers to push wages down by forbidding workers from getting jobs with their competitors.
Many major franchises also forbid their franchisees from hiring workers away from each other. So a McDonald’s on this corner isn’t allowed to hire away workers from the McDonald’s on the other corner by offering 25 cents more. (Such rules were a classic tool of white landlords in the Jim Crow South to keep down the pay of black sharecroppers.) And even employers that don’t have such a commanding position can still hire workers through contractors who do. Temp agencies, for example, can function like bottlenecks, forcing workers into monopsonistic labor market conditions on behalf of smaller, less powerful employers.
When you sell labor in the labor market, you’re entering into an ongoing power relationship. In return for your wages, you’re supposed to submit – not once but every day. It’s not just economic. Work is intrinsically political. Employers have a vast collective apparatus at their disposal: the stock market, the Fed, antitrust and employment law, just to name a few. The supreme court is weighing the question of the collective political power of workers. In the Janus v AFSCME case, an anti-union corporate group is seeking to take away the power of public sector unions to collect money from all workers whom they represent.The political power typically enjoyed by employers is generally experienced by workers as fear: fear of harassment, favoritism and wage theft, fear of joining a union or speaking out, fear of the consequences of injury or sickness, fear of the risks of asking for a raise, and beneath these, the fundamental workplace fear – of losing your job.
With unemployment down, more of us are becoming irreplaceable every day. There’s leverage for workers there, but you have to be willing to use it.