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Who’d a-Thunk It?
Posted By Don Boudreaux On January 17, 2014 @ 10:10 am In Reality Is Not Optional,Seen and Unseen,Work | Comments Disabled
Perhaps casinos in Queens, NY – or casinos generally – or New York City generally – or only buffet-restaurant workers at casinos in Queens, NY - or only buffet-restaurant workers at casinos in Queens, NY, in the month of January 2014 - or only buffet-restaurant workers at casinos named “Resorts World” in Queens, NY, in the month of January 2014 - are fortunately free of what many economists believe to be the prevalence of monopsony power among employers of low-skilled workers .
Or, alternatively, perhaps casino owners in Queens, NY, do have monopsony power over their low-skilled workers but – regrettably and mysteriously – also are among the ostensibly very few such employers who respond to enforced higher wages not in the way predicted by one “partial-equilibrium” model  but, instead, in ways that can be understood only from a more “general-equilibrium” perspective – for example, as the profits from devoting space to running buffet restaurants are reduced by enforced higher wages, even monopsonist casino owners shut such restaurants down and then use that space in other, less labor-intensive ways.
Whatever the case, who’d a-thunk that enforced higher wages would reduce low-skilled workers’ job prospects?  (Here’s some background .)
(HT David Cushman)
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URLs in this post:
 many economists believe to be the prevalence of monopsony power among employers of low-skilled workers: http://economistsview.typepad.com/economistsview/2006/12/an_interview_wi.html
 one “partial-equilibrium” model: http://en.wikipedia.org/wiki/Monopsony#Minimum_wage
 enforced higher wages would reduce low-skilled workers’ job prospects?: http://www.nytimes.com/2014/01/09/nyregion/after-winning-a-raise-175-casino-workers-in-queens-lose-their-jobs.html
 Here’s some background: http://www.nytimes.com/2013/10/28/nyregion/ruling-doubles-paycheck-for-1375-employees-at-high-grossing-queens-slot-parlor.html
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