based on the textbook "Microeconomics for MBAs"

based on the textbook "Microeconomics for MBAs"

A brief explanation of the economic phenomenon known as a monopsony.

Dr. Maddox explaining monopsony power in labor markets.

This video depicts an immigrant doctor from the Philippines who takes a job as a nurse in California and earns more money as a result. Various issues are raised related to immigration, exactly what is meant by a labor shortage, and international pay differentials. There is a longstanding literature in economics about monopsony in the labor market (employers holding down wages and creating a shortage) and its application to nursing in particular.

Now I tear apart the case I just made, which was the best case scenario for minimum wage. Waaaaaaaay too much time on my hands.

The nursing profession has been in continuous shortage. As these clips show, the shortage is not a recent phenomenon. Indeed, the economics literature has characterized the nurse labor market as "monopsonistic" for decades. (In a monopsonistic situation, wages and conditions are held below market clearing levels so that there are always excess vacancies at the prevailing wage.) Part 1 of 2 parts has clips from 1981 and 1987. Part 2 has clips from 1993, 2000, and 2005.

See description in Part 1.

clear commercial :))