Advantages Of Monopsony Power In Nursing

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Nursing "Shortages": Monopsony Power in the Market for Registered Nurses?

In the labor market for Registered nurses, Monopsony power may contribute to the apparent shortages of Registered nurses. Monopsony occurs where there is one major employer and many workers seeking to gain employment. Many reasons could be there for such distortions, like, workers are paid less than their marginal revenue product. Also, firms with monopsony power often have a degree of monopoly selling power. This enables them to make high profits at the expense of consumers and workers. And, less care is taken about working conditions because workers don’t have many alternatives to the main firm.
Nursing shortage is a major problem in the United States and there is
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Meaning the larger the hospital the less monopsony power is involved because there is a lot more to offer when it comes to the supply and demand, more supply and less demand of nurses compared to the smaller hospitals with no competition in the local areas, so the demand is higher for the nursing staff. The larger hospitals will pay more to the nursing staff compared to the smaller hospitals that pay less due the higher demand and less population in the area, this is where the monopsony power takes a great effect on the…show more content…
According to Hirsch BT, “Classic or new monopsony? Searching for evidence in nursing labor markets”, the article states that, “The market for registered nurses (RNs) is often offered as an example of "classic" monopsony, while a "new" monopsony literature emphasizes that firm labor supply is upward sloping independent of market structure. Wage level analysis fails to provide support for classic monopsony, the relative wages of RNs in 240 U.S. labor markets being largely uncorrelated with hospital system concentration” (Hirsch, 2005). So, with this information that this article has to offer I find to believe with these facts that it is very hard to determine whether the labor of nursing with the monopsony power can labeled as one or the other because it is always facing an upward and downward slope at different time

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