Abstract
How can employers worldwide be experiencing increasingly severe labour shortages in the face of globalization? Why don’t wages rise in expanding economies? This article argues that declining union power has allowed employers to take the upper hand, setting pay and other conditions of employment as they would in a monopsonistic labour market. Rejecting the perfect competition model matching supply to demand, the authors argue that, far from being a pedagogical curiosity, monopsony’s imbalance in bargaining power is widespread. Employee voice needs to be restored to counter the undesirable consequences of strong macroeconomic performance, such as wage inequality and reduced worker rights.