I take it that you consider the proximate cause of wage suppression to be information asymmetry, rather than naked monopsony power. Do you view this asymmetry as exogenous? Or does it indicate a continuation of monopsony by other means?
Naked monopsony seems to require that there be only, well, one buyer. But I look out at the world and I see lots of buyers. So I think it has to be some sort of "information" problem, with "information" very broadly construed...
The number of buyers isn't really small either, not for small businesses at least. However, small business owners seem to form a social class with coherent attitudes. Coherent behaviour would therefore not necessarily require collusion; perhaps one should consider an "effective buyer number" analogous to "effective population size." Then again, that coherent behaviour could comprise the production, suppression, or manipulation of information.
How to measure the "effective buyer number"? I don't know. But is there not a lump of probability on the minimum wage in the distribution of wages? Maybe, if you knew the buyer number as a function of wage (an empirical function I mean), you would do better to fit and paste a parametric form near the minimum wage than to take the nominal empirical value. I realize that's pretty hard; there is market segmentation, there are geographical penalties to account for. I'm not thinking very coherently myself, I suppose.
I take it that you consider the proximate cause of wage suppression to be information asymmetry, rather than naked monopsony power. Do you view this asymmetry as exogenous? Or does it indicate a continuation of monopsony by other means?
Naked monopsony seems to require that there be only, well, one buyer. But I look out at the world and I see lots of buyers. So I think it has to be some sort of "information" problem, with "information" very broadly construed...
Yes. I suppose I meant "oligopsony" - careless!
The number of buyers isn't really small either, not for small businesses at least. However, small business owners seem to form a social class with coherent attitudes. Coherent behaviour would therefore not necessarily require collusion; perhaps one should consider an "effective buyer number" analogous to "effective population size." Then again, that coherent behaviour could comprise the production, suppression, or manipulation of information.
How to measure the "effective buyer number"? I don't know. But is there not a lump of probability on the minimum wage in the distribution of wages? Maybe, if you knew the buyer number as a function of wage (an empirical function I mean), you would do better to fit and paste a parametric form near the minimum wage than to take the nominal empirical value. I realize that's pretty hard; there is market segmentation, there are geographical penalties to account for. I'm not thinking very coherently myself, I suppose.