A new answer could change how we think about unions, monopolies, and the minimum wage.
By JORDAN WEISSMANN
JAN 16, 20185:59 AM
If you were a delivery van driver searching for a new job any time between the years of 2010 and 2013, chances are, you wouldn’t have found many businesses competing for your services. In Selma, Alabama, there was, on average, just one company posting help wanted ads for those drivers on the nation’s biggest job board. In all of Orlando, Florida, there were about nine. Nationwide the average was about two.
The situation for telemarketers wasn’t great either. In any given city or town, approximately three companies were trying to hire for their services. Accountants only had it a little better: Roughly four businesses were posting jobs for them.
A lack of competition among employers gives businesses outsize power over workers, including the ability to tamp down on pay.
Those numbers are based on the findings of a new research paper that may help unlock the mystery of why Americans can’t seem to get a decent raise. Economists have struggled over that question for years now, as wage growth has stagnated and more of the nation’s income has shifted from the pockets of workers into the bank accounts of business owners. Since 1979, inflation-adjusted hourly pay is up just 3.41 percent for the middle 20 percent of Americans while labor’s overall share of national income has declined sharply since the early 2000s. There are lots of possible explanations for why this is, from long-term factors like the rise of automation and decline of organized labor, to short-term ones, such as the lingering weakness in the job market left over from the great recession. But a recent study by a group of labor economists introduces an interesting theory into the mix: Workers’ pay may be lagging because the U.S. is suffering from a shortage of employers.
Read more
https://slate.com/business/2018/01/a-new-theory-for-why-americans-cant-get-a-raise.html
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