Recent research in the US and Europe links concentration of employers’ market power with a reduction in the level of wages. A number of other factors may also contribute to increasing employers’ market power. These include information asymmetries, difficulties in changing jobs linked to the heterogeneous preferences of workers, and the widespread use of non-compete agreements. The more limited sway of today’s trade unions may not countervail this power effectively. This session will discuss the characteristics of labour input markets, the factors facilitating the creation and exploitation of monopsony power, and its effects on workers and consumers. It will also explore the role of competition authorities and the challenges they face in tackling employer monopsony power.
