"One leading hypothesis is that firms employing low-wage workers—such as fast-food chains—have significant monopsony power in the labor market; that is, they are the principal purchasers of low-wage labor in a particular job market. And a monopsonist facing a price floor doesn’t necessarily buy less, just as a monopolist facing a price ceiling doesn’t necessarily sell less and may sell more."
"The employment effect of the minimum wage is one of the most studied topics in all of economics. This report examines the most recent wave of this research – roughly since 2000 – to determine the best current estimates of the impact of increases in the minimum wage on the employment prospects of low-wage workers. The weight of that evidence points to little or no employment response to modest increases in the minimum wage."
Thanks for teaching me a new word (monopsony)! It's been a long while since my vocabulary has been increased with something that's not a millennial invention.
Farmers know that term very well. When the second loading ramp or grain elevator closes, and there's only one buyer left, farmers face a monopsony. Farmers have fought back with co-ops and Government price supports.
- Krugman, http://www.nybooks.com/articles/2015/12/17/robert-reich-chal...
"The employment effect of the minimum wage is one of the most studied topics in all of economics. This report examines the most recent wave of this research – roughly since 2000 – to determine the best current estimates of the impact of increases in the minimum wage on the employment prospects of low-wage workers. The weight of that evidence points to little or no employment response to modest increases in the minimum wage."
Schmitt, https://cepr.net/documents/publications/min-wage-2013-02.pdf