Orthodox market economics holds that when unemployment falls and the
labor supply gets tighter wages go up; it also predicts that
better-educated workers and more-productive workers get paid more for
their work – none of this has happened.
American unemployment stands at 4% and the workforce is the
best-educated, most productive in history. The Fed is about to raise
interests rates to fight nonexistent inflation, which will further
punish workers, who’ve gone into debt to make ends meet while their
wages stagnated.
Yale historian Gabriel Winant has a pretty simple explanation for what’s
happened: monopolism. Most labor markets are beyond “highly
concentrated” (in the technical sense used by antitrust regulators),
with few employers bidding for workers, and the employers collude to
have no-poaching arrangements (for example, franchisees are not allowed
to tempt one another’s employees to jump ship by offering higher wages).
Even in places where employers don’t collude, they hire through
staffing agencies that act as wage suppressors, offering the same low
wages to all comers.
With the forces of capital colluding to suppress workers’ wages, it’s no
surprise that wildcat strikes and labor militantism are on the rise –
and about time, too.
