"As readers of this blog know, I often respond to pro-mimimim-wage arguments by advising those who make such arguments to put their money where their mouths are. Specifically, whenever I encounter the assertion that minimum-wage legislation is justified because employers of low-skilled workers allegedly possess monopsony power, I point out to those who assert the existence in reality of monopsony power as a reason to impose a minimum wage that their assertion implies the existence of profit opportunities for anyone who enters the market to hire away these allegedly underpaid workers. So I ask those who assert that monopsony power is real and relevant to start their own businesses to give solid evidence of the strength of their belief.
The typical response to my suggestion is hostile. “Oh that’s silly! I’m a college professor / graduate student / newspaper pundit,” the typical such minimum-wage proponent retorts. “I have no special ability to launch a real-world business.”
Well I’ve solved the problem for those professors and pundits who believe that monopsony power exists but who also are too inept to undertake the challenging tasks of operating real-world businesses. I know a very successful and savvy businessman in California, Mike Long – a man of enormous integrity and experience – who stands ready to share with you his time, expertise, and counsel in order to guide you in starting and operating your own businesses. All you need do is to supply some of your own seed capital – say, a minimum of $25,000 – and Mike will help guide you to launch and run your business in order to take advantage of the profit opportunity that your identification of monopsony power implies is available for the taking. Mike can even share with you his knowledge of how to get from the capital markets any additional financing you might need."
Friday, July 31, 2015
Make Money On Your Identification of Monopsony Power (a minimum wage issue)
By Don Boudreaux of Cafe Hayek.