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The Job Monopoly: How companies keep pay low

In the January 23, 2018 Ask The Headhunter Newsletter, we take a look at the job monopoly that keeps a lid on pay. Question You've probably already read this on Slate. Three economists conducted a study that asks, Why Is It So Hard for Americans to Get a Decent Raise? (The paper is only in draft form so Slate includes no link to it.) I think your readers might have some interesting things to say about whether there’s a job monopoly that controls their pay. Here are the key points: "Workers' pay may be lagging because the U.S. is suffering

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Most important question raised in the article: "To what extent does consolidation of hiring by a relatively small number of body shops (I think body shops is the more accurate moniker) result in manipulation of pay?"

BAM

I think we're on to something, here. If body shops can work to keep wages almost globally low, then what does a company care about paying them a premium for that service? If pay+body shop fee < normal pay, then that body shop is doing its job for the firm just fine.

Quote from: deanwebb on January 23, 2018, 10:06:08 AM
Most important question raised in the article: "To what extent does consolidation of hiring by a relatively small number of body shops (I think body shops is the more accurate moniker) result in manipulation of pay?"

BAM

I think we're on to something, here. If body shops can work to keep wages almost globally low, then what does a company care about paying them a premium for that service? If pay+body shop fee < normal pay, then that body shop is doing its job for the firm just fine.

In the recruiting world, in some scenarios those that recruit get paid a certain percentage between the difference of the bill rate and pay rate. so it's a benefit to them to charge the company lots of $$$$ and pay the labor $. Puts a bigger paycheck in their pocket.

Heck, they can charge $$ and pay $ and still make a huge profit if they deal in bulk, which many of them do.