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Stunted Career Growth in Monopolies

Stunted Career Growth in Monopolies

A monopoly is a kind of structure that exists when one company or supplier produces and sells a product. If there is a monopoly in a single market with no other substitutes, it becomes a “pure monopoly’’.

For a long time, the conventional wisdom was that wage growth had slowed because of rising competition from low-paid workers in foreign countries (globalization), as well as the replacement of workers with machinery, including robots (automation). But in recent years, economists have discovered another source: the growth of the labour market power of employers — namely, their power to dictate, and hence suppress, wages.

This new wisdom has displaced a longstanding assumption among economists that labour markets are competitive. In a competitive labour market, employers must vie for workers; they try to lure workers from other firms by offering them more generous compensation. As employers bid for workers, wages and benefits rise. An employer gains by hiring a worker whenever the worker’s wage is less than the revenue the worker will generate for the employer; for this reason, the process of competition among employers for workers ought to result in workers receiving a substantial portion of the output they contribute to.

And as the economy grows over time — which has historically been the case in the United States — this dynamic should naturally lead to a steady increase in compensation for workers.

It turns out, however, that labour markets are often uncompetitive: Employers have the power to hold down wages by a host of methods and for numerous reasons. And new academic studies suggest the markets have been growing ever more uncompetitive over time.

Economists are starting to ask whether increasing industrial concentration is choking off productivity growth, reducing capital investment, throttling or deterring would-be entrepreneurs, raising consumer prices, and reducing the share of national income flowing to workers.

This is a good and important effort. But it’s also possible that with all the attention being paid to concentration at the industry level, there hasn’t been enough focus on the other end of the monopoly problem -- local labour markets.

Monopoly means there’s only one company to sell you products, like broadband services or airline tickets. If there’s only one company, or only a few, they can jack up the prices. But even if this is happening, the effect isn’t that severe. Looking at overall trends, we see that prices for consumer goods such as clothes, furniture, electronics and toys have generally fallen, while the prices of essentials like food, housing and transportation have risen only modestly -- it’s health care and education that are driving inflation. But the real problem is the sluggish growth of real wages in recent years.

With all the monopolistic careers that feature various form of limitation, there is one thing in common, employees find it hard to grow as individuals in these departments. Industries such as telecommunication, Motor industry and it related institutes tend to have fewer growth rates as compared to other career striving avenues.

Although the modern business market is invested in breaking the trend of monopolies and monopolistic careers in general, there are still a lot to be done in order to achieve a more free space for career growth. The motivational factor behind such ventures is usually very low as employees seek to evolve into prime professionals who know what they want to do in their professional life and want to achieve success through well-co-ordinated future plans.

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