Workers’ bargaining power in the United States over time
A prominent feature of the post-Great Recession U.S. economy is the lack of adequate wage growth despite a tight labor market. One explanation is that a decline in workers’ bargaining power put downward pressure on wage growth. The declining labor share of income is popularly cited as one reason behind weakened worker bargaining power, and a burgeoning field of research ascribes much of this decline to the increase in monopsony power in the United States. This researcher seeks to estimate workers’ bargaining power over time in the United States. It will make some important extensions on the job search model, and then move onto a model of wage determination that looks at how labor market dynamics, such as vacancies and unemployment, impact wage determination via worker bargaining power.