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No One Wants to Work [For You] Anymore: The End of Oligopsony

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[NB: Note the byline above, thanks. /~Rayne]

There are few ways faster to piss me off than to say, “Slackers don’t want to work” in response to the lack of candidates for low-wage jobs.

This is what it looks like when a monopsonic or oligopsonic labor market is broken. It looks like workers can pick and choose the opportunity which best suits their needs rather than grabbing the first opportunity offered them because they are in precarity.

An oligopsony (from Greek ὀλίγοι (oligoi) “few” and ὀψωνία (opsōnia) “purchase”) is a market form in which the number of buyers is small while the number of sellers in theory could be large. This typically happens in a market for inputs where numerous suppliers are competing to sell their product to a small number of (often large and powerful) buyers. … [Wikipedia]

But there are more than one buyer (monopsony) or even very few buyers (oligopsony) of labor, you might say. Superficially you’d have a point.

Inside a one-mile stretch of the main thoroughfare where I live in Midwestern Suburbia, I can find 8-12 signs advertising job openings right now. I’ve lived here since the late 1970s and I’ve never seen this many postings for jobs.

Every single one of these jobs pays between $3.67 (Michigan’s minimum tipped hourly wage) and $15.00 an hour. None of them are full time, most have variable schedules, and only one place assures workers one weekend day off every week. None of them offer health care or childcare assistance of any kind. None of them offer enough hours regularly with enough compensation to pay for a one-bedroom apartment within walking distance, and likely not within a 10-mile radius.

Until the pandemic, these employers were able to tell workers what they’d pay, take it or leave it. They could act in concert without having to coordinate to set market pricing because it was simply understood by workers that hourly workers’ pay fell in this range and it was an employers’ market.

Employers have acted like a cartel, with collusion on price fixing for labor enabled by other monopolistic entities like Facebook and Google.

Workers may have thought they had some inside information through access to technology, but the same resources which informed them what to expect for compensation also told employers what to indicate as expected compensation. It told them what their competitors were paying.

Further, employers could buy the continuation of their high profits, I mean, low wage environment, simply by donating to a member of Congress directly or through a business association like the U.S. Chamber of Commerce. These same purchased entities also did their best over the last several decades to reduce workers’ rights and suppress unionization.

It’s been cheaper and more reliable to buy a GOP member of Congress than to increase automation or to pay workers a living wage.

It’s also worked so well for so long that idiots like Sen. Marco Rubio unquestioningly parrot employers’ complaints as plain fact, ignoring how many voters are workers while sucking up to potential business donors:


Never mind the cost of living for low-wage workers, though.


Seriously, Marco Rubio is a bought-and-paid-for moron who, along with the rest of the GOP, could give a shit about the lives of the working class.

What the pandemic has done is broken the undocumented employer cartel and exposed the lack of bargaining power low-wage employees have had for decades. That unemployment compensation — a ridiculously low figure which doesn’t truly provide subsistence income — is more than what employers have paid these workers is revealing. They’ve gotten away with forcing precarity on workers to keep profits up, distorting whether their business models were legitimate. Some of the precarity is bound up in deliberately unlawful behavior including wage theft.

With a bare minimum of unemployment and pandemic aid, these workers have had breathing room to decide whether to go back to work and risk their health, or wait for more people to be vaccinated. They’ve had financial space to stay with their kids who still don’t have adequate childcare available or adequate support should schools need to transition back to remote classes on short notice.

These workers have also simply had enough — enough putting themselves at risk, jeopardizing their families’ health, enough of being bullied by employers and customers alike.


…


…


This is just pathetic — a sandwich? Employers are going to respond to all that’s wrong with current working conditions by chumming applicants with sandwiches?


McDonald’s franchises have been offering cash ranging from $50 in Florida to $500 in Pennsylvania to applicants who showed up for an interview. At least one franchise is alleged to have called the state’s unemployment bureau to turn in applicants who didn’t accept their employment offer, in an effort to terminate their unemployment benefits.

All these nasty anti-worker machinations just to avoid paying a living wage, which employers know is the reason they aren’t landing applicants:

So, in an effort to attract new employees, a Tampa McDonald’s is now promising $50 to anyone who just shows up for an interview.

Local McDonald’s franchise owner Blake Casper, who also owns Oxford Exchange, told Business Insider that a manager at his Dale Mabry and Chestnut location came up with the idea, but far so it hasn’t really yielded much success. …

Of course, one way to attract new employees is to just pay them more, and while he hasn’t done it yet, Casper told Business Insider he’s now considering raising starting wages to $13. As of now, according to a job posting on Indeed.com for the same Dale Mabry McDonald’s location, new employees can make up to $11.50 an hour.

Last year, more than 60% of Florida voters approved a constitutional amendment to raise Florida’s minimum wage to $15 per hour by the year 2026.

Workers clearly believe 2026 is too long to wait for a living wage — and $15 an hour in 2026 may not be a living wage by then, given the rate at which real estate investors have forced rental prices out of reach for low-wage workers.

Employers know better, and yet they have the goddamned balls to ask for more free labor:


Mind you, no more than three free days a month or the company might get in trouble — oh, and do be sure to dress like you’re being paid for it.

Workers would rather bust hump on their own, eat deterioration of their own vehicle and amortize it rather than take a minimum wage hourly job:


When they work as a contractor on a gig job, it pays better and their boss isn’t a bullying asshole who puts their safety at risk.

But of course the GOP has a problem with helping these small business persons with their tiny entrepreneurial aspirations who are trying to earn a living wage while not risking their physical and mental health:


Meanwhile, journalists aren’t asking key questions, rolling over and playing dead for the likes of Marco Rubio when he trots out the fascist conventional wisdom that workers are lazy. They aren’t asking businesses if they’re re-examining their business model the way workers have had to re-examine their priorities.


The least we and journalists should be doing: asking business-owned chumps like Rubio more pointed questions about employers, especially when they’re buying support yachts for their mega-yachts:

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51 replies
  1. Rayne says:

    I am seriously pissed off about this topic. I see people like this in my timeline and wonder if they got COVID because they couldn’t afford not to work.

  2. bmaz says:

    This post is quite right. The BS that “people just don’t want to work because of the $300” is some serious garbage. Would paying people a living wage affect some business? Of course it will, and that needs to be done. If your local restaurant or other business can’t do it, fuck them, you should stop supporting them now, especially if it is some crappy chain.

    • Rayne says:

      Any business which can’t pay workers a living wage along with providing a full-time schedule obligating payment of unemployment insurance is not a legitimate business model.

      I’m thinking of the McDonald’s in the article above where management isn’t yet paying $13/hour; they’re only now paying $11.50/hour. Wow…so they’d have to pay another $1.50/hour per crew member, averaging 5-9 crew members depending on how busy the shift. That’s a whopping $7.50 to $13.50 increase in labor costs per hour. Sell three more pricey coffees or a couple more 20-piece chicken tenders, or three Big Macs, for Christ’s sake. Probably losing sales by not having enough staff to serve expeditiously — the labor cost increase would pay for itself.

        • Rayne says:

          Sadly, their fish filet is still better than whatever that thing is Burger King serves. Wish they’d slap some lettuce on it like the competition does, though.

          I pity the poor crew who have to sling this stuff all day every day. Mind numbing on top of not getting paid enough.

      • P J Evans says:

        And In-n-Out was starting people at $10.50 an hour – in 2005. Their burgers may cost more than McD’s, but it’s the ingredients, not the labor.

        • Rayne says:

          Outlier In-and-Out may depend on the local market wrt pay along with branding cachet. Can bet all the big names hew closely to their invisibly agreed upon hourly rate; I’ve never heard that any one of the chains in that mile-long stretch near me paid above state minimum for entry, whether McD’s, Wendy’s, Arby’s, Burger King, Taco Bell, Coldstone Creamery, Starbucks, KFC, Tim Horton’s, etc. One grocery store is slightly higher but they cut all the other amenities (Aldis) and have very few crew members. The sit-down restaurants are also neck-and-neck whether national chain like Applebee’s or the local mom-and-pop joints.

            • earlofhuntingdon says:

              How does it compare to Sonic and its car hops? Or Umami’s burgers? (I think Taco Surf’s menu beats ’em all.)

              • bmaz says:

                Don’t know that I’ve had a burger from Sonic, but they are generally fairly decent as to what they serve. Their milkshakes are fantastic, especially the banana ones. For burgers, there are three very much not chain restaurants nearby that we go to, if not cooking on our own grill.

                Dammit, now I am hungry for a burger and it is not even 7:20 am here.

                • earlofhuntingdon says:

                  Nothing beats the date shake. It’ll make your teeth ache until your next dental appointment. I’ve only found it on a desert highway south of Phoenix, after I forget how many border patrol stops.

                  As for the price of leaf protection gutters you asked about on twtr, yes, like other forms of extortion, they cost a fortune. But there are several kinds, not all of them equally extortionate.

                  • bmaz says:

                    There are two joints for these. One is off of I-10 near Palm Springs, the other, is the famous one off of I-8 east of Yuma on the way to Phoenix, literally in a little town called Dateland. The latter is a little better. Date shakes are simply amazing though.

                    • P J Evans says:

                      We got a Christmas gift mailed from Dateland once. Not dates! (Granny was going through with a couple of her sons – their car, as she didn’t drive cars.) Longish story, the Dateland bit was effectively the punchline.

                  • earlofhuntingdon says:

                    Thanks. I knew it was between SD and Phoenix, but couldn’t remember where. I agree, the one off I-8 is better. Being east of Yuma would also put it past the BP stops I’ve encountered. One shake, though, didn’t last until Sedona. Didn’t last until Phoenix, for that matter.

                    • bmaz says:

                      I have had to go down to San Luis and Los Algodones often. Always stop by that place and get a giant date shake. Good thing don’t live close to there, else would resemble a blimp.

            • Valley girl says:

              One of the first In&Outs was near where I went to college- burgers seriously good back then. I went to the I & O in Northridge when I was clearing out my mother’s house and the food was mediocre at best. I don’t get the hype either.

              • P J Evans says:

                The one in front of Costco, I take it. (I’m more likely to go to the one in Porter Ranch.)

            • ApacheTrout says:

              Absolutely love the Double Double. Whenever I fly home to SoCal, I stop at the first InO I see after leaving the airport.

              Mmmm.

      • ApacheTrout says:

        I own and pay my seasonal FTE $16.50 and $15 per hr and I know that’s just barely enough. Incredibly, as an agricultural business, I am exempt from VT’s minimum wage laws (min wage $11.75) and could pay my employees the federal minimum wage of $7.25/hr. That’s absurd and nobody here in VT would ever get employees if they did that.

        Unfortunately, I compete against nurseries in TN, OH, and the mid-Atlantic that use migrant labor (not the H2-A program but the *cough* other seasonal kind) and take full advantage of that federal minimum.

        Absurd.

        • Rayne says:

          Thanks for sharing that detail. You point to an illegitimate business model your competition uses which forces other legitimate businesses to make cuts elsewhere, fold if pressure is too great, or cave in and adopt the same model. It’s that illegitimate model we need to address. How do we ensure there’s a level playing field for all small businesses?

          I don’t think we’re going to get through the next decade without embracing migrant labor; they should be fairly compensated, and they should pay into our tax system because they rely on our infrastructure while here.

          • P J Evans says:

            I understand a lot have SS numbers, but not legally, so they pay in but can’t benefit.

  4. earlofhuntingdon says:

    Nicely done, thanks. Related to predatory pay scales is predatory tax avoidance. A particularly nasty example from the UK is the use of “umbrella” companies. (Not related, except in spirit, to the company made famous by the Resident Evil franchise).

    In the UK, new employers receive subsidies that relieve them of some of their employment-related tax costs. Once a threshold is met, companies become liable to pay normal rates. The tax avoidance industry has a solution for this problem: the umbrella company. These are shell companies, usually incorporated offshore, which act as cut-outs (an arrangement enabled by lax corporate disclosure rules). As one umbrella company uses up its tax relief, it dumps its employees onto another umbrella company that hasn’t. Wash, rinse, repeat.

    The scheme costs the treasury several billion pounds a year. It’s worse for employees. Like a ship’s bulk cargo – often sold multiple times between ports – employees are moved from one nominal employer to another, without their knowledge or consent, and without changing the circumstances of their work. Good luck finding an employer against whom to file a grievance. (Foreign incorporation, of course, does not mean foreign beneficial ownership. No wonder neoliberal Brit billionaires wanted out of from under EU labor rules.)

    These schemes are bad for employees. But they are also bad for government and for the economy as a whole. That’s because the rules that apply to the most vulnerable employees also comprise the floor supporting all employment. They harm everybody, except those in the c-suites, and their consultants and lobbyists.

    https://www.theguardian.com/business/2021/may/16/hidden-cost-of-umbrella-companies-in-uk-may-top-45bn-a-year
    https://www.theguardian.com/business/2021/may/10/tax-dodging-concerns-over-small-firms-used-to-pay-nhs-test-and-trace-workers

    • Rayne says:

      This is why Sen. Warren’s proposed 21% global minimum corporate tax is a must. Corporations shouldn’t be able to slink off and hide income in offshore vehicles no matter the country of domicile. But guess which country is most resistant to the idea?

      Wonder what Boris Johnson and his corrupt circle have offshore they are trying to hide from taxes.

      • earlofhuntingdon says:

        Indeed. I suspect the same consultants are behind the myriad of tax avoidance schemes and their money-laundering counterparts. The UK is second-to-none in lax disclosure rules that allow the hiding of true beneficial ownership of corporations, trusts, and so on. While foreign money benefits handsomely from these arrangements – hosted by British territories, from the Caribbean to Gibraltar, the Channel Islands, the Isle of Man – domestic money does even more so.

        It starts, no doubt, with the royal household, but it’s enjoyed by anyone with the money. Your Surrey neighbor might own half the street you live on, but you would never know it, once ownership passes through various trusts and offshore entitites. But few gobble up Dutch sandwiches and Irish tax goodies like the way American corporations do. It keeps the vicious Ueber going, for example, despite its doomed business model.

        • Peterr says:

          The Guardian has a great piece up as they try to answer what should be a simple question:

          Who owns Australia?

          Complex web of data reveals large swathes of country controlled by small number of billionaires and large companies

          I’m shocked. Shocked, I tell you . . .

          But the answer is more complicated than the subhead indicates. It’s a good read, and well worth digging into.

          • earlofhuntingdon says:

            Like the UK, on which much of its rules are modeled, tracking true beneficial ownership – necessary for even minimal accountability – is difficult. Plus, the Aussie establishment seems even more addicted to racism and the ruthless extraction of resources.

          • earlofhuntingdon says:

            Another pet peeve I have is the cultural takeover of higher education by big bidness. It’s lucrative to have a Sloan, Rockefeller, Dimon or Bezos – or more likely, one of their courtiers – on your board, but the price you pay is adopting their business models: it’s both familiar and legitimizes it.

            Students become the lever and fulcrum for raising masses of student debt. Chiefs of staff, limpet-like, glom onto “ceo” presidents. Deans and deanlets sprout like mushrooms in the dark, their places and salaries justified by “throughput” and “assets under management,” like snack bars.

            Support staff and faculty are outsourced, the better to wield ruthless practices on them without tarring the institution. And faculty become another union that gets in the way of efficient management. Instead of modeling learning and citizenry, they model ruthless extraction. Bullshit. Henry Giroux has much to say on the topic.

    • Ralf Maximus says:

      Just to be clear: Delta’s ‘loyalty lounge’ is a freebie for First Class & Business class travellers. Coach passengers — even frequent flyers — aren’t allowed. But they CAN buy a “day pass” for $40 to avail themselves of the free booze & wifi.

      That Delta asks for volunteers to wait on the overprivileged is especially galling.

      • Rayne says:

        An entirely new iteration of Let them eat cake, n’est-ce pas? You’d think they’d clue in but apparently they need to hear the tumbrils rolling, smell the torches burning and pitch boiling, see the sparks fly as the axes and scythes are honed.

      • P J Evans says:

        Given that their CEO could pay for people by taking a couple million less a year – it’s really bad management.

  6. Rugger9 says:

    It’s the invisible hand of the market at work, which the GQP can’t stand because they are selective hypocrites. People forget that Henry Ford, no friend of labor, had to pay his workers a premium to work on his assembly lines. Ford also understood that extra income would allow his workers to buy the Model Ts for example. Since he was Henry Ford, he would also fire people caught driving a competitor’s car.

  7. Peterr says:

    Dale Mortensen, one of my former profs and all-around great guy to work for, was awarded the Nobel prize in Economics in 2010 for his work on friction in the labor market. Economic models assume that buyers and sellers meet and transact their business with no outside costs, but in the real world, such interactions have costs to both sides, as well as costs that are externalized to society as a whole. Mortensen was among the first to identify and model the costs of such frictions.

    All those who are blathering about lazy folks who are staying home because they get more on unemployment than they do on the job ought to read Mortensen.

    The pandemic has brought out into the open the friction in the labor market caused by child care costs. It has brought into the open the friction caused by transportation costs between where workers can afford to live vs where the poorly paying jobs are. It has brought into the open the friction in the labor market caused by lack of affordable health care when everyone is worried about health issues.

    The pandemic has been a shock to the economic system, and honest economists will be studying it for years to sort out things like those I mentioned above. Things will not go back to the way they were, because all kinds of folks are revising their priorities, reexamining their supply chains, and reevaluating the relationship between owners, managers, and workers.

    Another “tell” from the folks who complain about folks staying home on unemployment is the parallel moaning that we can’t raise taxes on corporations, or jobs will go overseas. Folks, jobs do not “go” anywhere — they are sent. When you hear business leaders using the passive voice, dig a little deeper — they are hiding something.

    In metro KC, business owners game both Kansas and Missouri by threatening to jump from one side of the state line to the other, unless they get a tax break. Nationally, business owners make conscious decision to shut down a factory here and open one up in some other nation. It’s what they do — or at least it’s what they’ve done in the past, until a worldwide pandemic made them rethink supply chains that are far more fragile than they realized. Jobs do not decide to leave; owners and managers decide to move them.

    More on Mortensen here.

  8. earlofhuntingdon says:

    Based on today’s S.Ct. news, it seems the GOP are so confident about winning both houses of Congress in 2022, they plan to run on bad S.Ct. rulings. National concealed carry, and fuck your rules about precedent and criminal procedure-jury verdict decisions nicely bookending forthcoming new restrictions that will likely gut Roe v. Wade. Just callin’ balls and strikes, m’am. But welcome to these here Christian States of America. Fire ‘n brimstone our specialty.

  9. earofhuntingdon says:

    The primary institutional rebuilding President Obama did in eight years was to the powers of the presidency – and the enforcement of the Espionage Act – already overstretched by CheneyBush. It’s one reason we’re in the mess we are now, especially with regard to staffing the judiciary and the knottier problem of circumscribing the effects of political stay-behinds inside the federal bureaucracy.

    It’s worse now, because Donald Trump was the quintessential institution destroyer, believing that their norms expose his inadequacies, and threaten his liberty and his money. That means there’s more work to be done now than at the beginning of the Obama-Biden administration. Joe Biden’s approach to fixing the decades-old problems of presidential clemency, for example, suggests that rebuilding essential institutions is not part of his agenda. Combine that with the Trump-McConnell packing of the judiciary and the GOP’s rejection of “elections” it does not win, and you have a ticket to autocracy.

    We can work feverishly to try to remedy that while there’s still time, or carve American democracy’s tombstone. There’s no middle ground, any more than there is between Trumpism and the Democrats. It is an awful lot to lay on any president’s shoulders, but you fight the politics you have, not the ones you want.

    https://twitter.com/RachelBarkow/status/1394641294740316161

    • earlofhuntingdon says:

      Another good framing of this problem from the WaPo’s Greg Sargent. Regarding his rejection of the compromise 1/6 commission, “[Kevin McCarthy] wants…a permanent justification for GOP abandoning democracy. Its goal is to obscure the unilateral radical threat the GOP poses to democratic stability.”

      https://twitter.com/ThePlumLineGS/status/1394645577368051719

      I also want to tout a Denver goldmine: the independent Tattered Cover bookstore, which is hosting a talk by NYU’s Rachel Barkow and others on this topic next week. Tattered Cover has passed from its original owner more than once, but its current ones have surprisingly worked to keep up its traditions.

      https://www.tatteredcover.com/event/tattered-cover-presents-criminal-justice-system-reform
      https://en.wikipedia.org/wiki/Tattered_Cover

    • earlofhuntingdon says:

      The GOP wants elections only to rubber stamp the appointment of the names on its nomenklatura. That’s a game won by extremists, as each appointee tries to outdo the excesses of her predecessor. Under that scenario, Boebert, Greene, Gaetz and Gohmert would become the conservative wing of the GOP; Liz Cheney would be reduced to a rhetorical symbol of what we are not now; and Dems would wait for the knock on the door, which won’t be a delivery from Amazin. We can do better, but it’s a contact sport, with few restrictions on the use of knees and elbows.

      • P J Evans says:

        Some of them make it obvious that they’re not interested in governing or democracy: they want to *rule*, and the heck with the peasants (everyone who doesn’t bow and scrape before them). Boebert is saying that when she becomes speaker she’ll use the metal detectors for target practice. (She’s assuming she can get that far. And that without metal detectors no one will try taking *her* out.)

        • tinao says:

          Who cares about them PJ Evans, hopefully not the majority. That big ole word.
          Once again proving life belongs.

  10. e.a.f. says:

    If employers can not afford to pay workers a decent living wage then they ought not to be in business. You can not ask people to support your business by working for wages which do not permit them to live in decent housing, pay for groceries and take care of medical expenses and child care. If you can’t afford to pay a living wage then you are either engaging in a hobby or a corporation ripping off the workers.

    When companies don’t pay people a living wage you increase child poverty and when you increase child poverty you are creating a huge social problem in your country.

    If low wages meant that countries did better than central and south america would be doing much better than western europe, but that isn’t the case.

    When people are working full time and need to use food stamps and food banks to eat and provide food for their children, then the employers are simply welfare corporations. If welfare is going to be handed out, it should go to children, not corporations and their executives.

    Perhaps some of those republicans ought to try living on a min. wage budget for a month. Back in the day a member of the opposition party in british columbia lived on the welfare rate for a month. he lost a lot of weight.

    • Rayne says:

      “If employers can not afford to pay workers a decent living wage then they ought not to be in business.”

      Exactly. They’ve constructed and relied on a business model requiring humans to provide labor at insupportable wages. They’ve been able to rely on an invisible agreement between other businesses that this is the model they will use without any negotiation from low-wage workers.

      And there’s been an agreement that the public will support this by providing public assistance to a sizable portion of these workers. WE are paying the supplement needed for these workers to live rather than the true cost of their labor being reflected in cost of goods sold. Businesses including mega-corporations like Walmart have privatized profits while shifting their expenses to the public.

      We’re done with it. Welcome to the free market.

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