This article first appeared in the Planet Money newsletter.
I’m about to get into a new book with a provocative argument about why income inequality has exploded in America and how to fight it. At the center of this economic discussion is a concept that has me thinking a lot about the labor economics of the movie Alien.
Alien, the classic sci-fi horror starring Sigourney Weaver, gives an extreme illustration of a common economic problem. In the franchise’s backstory, a British company and a Japanese company merged into the multinational Weyland-Yutani Corporation, a sprawling conglomerate with influence across space and apparently little regulation. In the original film, Ripley and her crew on the USCSS Nostromo are essentially space truckers hauling ore for Weyland-Yutani. On the way home, the company reroutes them after their ship detects a mysterious signal on a distant moon.
The crew complains about the diversion and wants to go home. One crewmember—an android secretly working for the company—cites contract fine print: signals like this must be investigated or the crew forfeits pay. With no bargaining power and no outside options, the workers comply. Their forced stop leads to the discovery of alien eggs, a facehugger implants an embryo in a crewmember, Ripley urges quarantine, and the company’s lackey overrides safety to retrieve the specimen. The directive is explicit: study the alien for weapons, and “All other considerations second. Crew expendable.” The rest is horror: the chestburster that kills crew members and the company’s callous prioritization of profit over safety feels like a darkly literal workers’ comp case.
Economically, Weyland-Yutani is an exaggerated example of monopsony. A monopsony is the mirror of a monopoly: instead of one seller, it’s one buyer. In labor markets, employers buy labor. If a single employer dominates hiring in a place and workers lack outside options, that employer gains power to set wages and conditions. Historically, economists treated monopsonies as rare—examples were often remote mining towns—but recent research challenges that view.
In The Wage Standard: What’s Wrong in the Labor Market and How to Fix It, economist Arindrajit Dube argues, drawing on a growing body of peer-reviewed work, that monopsony power is far more pervasive than previously thought. Dube and others use “monopsony power” to describe situations where employers face weak competition for workers—not necessarily being the sole employer, but having enough leverage to underpay or mistreat employees.
This view rejects the old free-market assumption that labor markets are broadly competitive and self-correcting. If employers routinely have hiring and wage-setting power, society needs counterweights: minimum wages, antitrust enforcement, public pressure, business norms about fairness, and unions. With such institutions weakened since the early 1980s—declining union coverage, stagnant minimum wages, and corporate shifts away from equity—employer power grew and helped drive rising income inequality.
Dube’s account also has an optimistic strand. He points out that, at least recently, some institutions and policies have been revitalized or reimagined in ways that could reduce employer power and restore greater equality in the labor market.
We’ll dive deeper into The Wage Standard, the intellectual history of monopsony, and why Dube thinks monopsony power is widespread in next week’s Planet Money newsletter. If you’re not subscribed, sign up for future issues.