Deviations from the textbook economics model can create situations in which employees are paid less than the value of their output. One way in which this could happen would be if the employer has what is called market power. In the case of a producer market power is usually the result of monopoly or oligopoly; in this case it would be the consumer of the good (labor) with the market power, and this is called either monopsony or oligopsony. The classic case of monopsony would be the company town, a labor market in which there is only one consumer of labor, the single employer in town.
Interestingly, American Samoa, where Starfish Tuna canneries employ most of the working population, was the one US territory specifically excluded from the new minimum wage. The justification given was that it would lead to unemployment there.
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winterfish
tunafish
Date: 2007-02-15 01:35 am (UTC)Interestingly, American Samoa, where Starfish Tuna canneries employ most of the working population, was the one US territory specifically excluded from the new minimum wage. The justification given was that it would lead to unemployment there.