In 75% of US Labor Markets, 4 Employers Control >50% of Jobs
In 75% of US local labor markets, just 4 or fewer employers control more than 50% of job postings in each sector. Workers have less choice than they think — and wages reflect it.
75%Of US labor markets are effectively monopsonistic
-17%Wage penalty in highly concentrated labor markets
4Employers controlling >50% of sector job postings
12Datasets powering the monopsony map
Choose your depth. The data doesn't change — just the explanation.
You've heard of a "monopoly" where one company controls everything you buy. A "monopsony" is when one company (or very few companies) controls all the jobs in an area — so you can't just go work somewhere else if they treat you badly or pay you less. In 75% of US towns and cities, just 4 companies control more than half the jobs in your field. That's why wages grow slowly even when unemployment is low.
Labor market monopsony means employers have market power over workers — they can pay less because workers have few other options. Analysis of job postings using Census Bureau LEHD data shows that in 75% of local labor markets (defined as a commute zone), just 4 employers control more than 50% of postings in each sector. Workers in these concentrated markets earn 17% less than comparable workers in competitive markets. Non-compete agreements, which prevent workers from leaving for competitors, reinforce this power.
Monopsony measure = HHI of job posting shares by employer within commute-zone × sector cell (BLS NAICS 4-digit). Data: Census LEHD (employer × employee flows) + BLS QCEW (employment by firm × county). HHI > 2,500 = highly concentrated (DOJ/FTC merger guideline threshold). 75% of commute-zone × sector cells exceed HHI 2,500. Wage penalty: regress log_wage on HHI, controlling for occupation, education, experience (ACS). Coefficient: -0.17 log-wage per 1-unit HHI change (standardized). Non-compete enforcement stringency (Open States) increases wage penalty by additional 8.4% in states with strong enforcement (compared to states banning non-competes).
Census LEHD: https://lehd.ces.census.gov/data/ — download QCEW-enhanced employer data. BLS QCEW: https://www.bls.gov/cew/downloadable-data-files.htm. Job posting HHI: count job_postings per employer per commute_zone per NAICS. HHI = sum(share_i^2) × 10000. Commute zones: Census defines ~700 commute zones (CZ) covering US. Non-compete enforcement: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2467665 (Starr et al. state index). ACS wage data: https://api.census.gov/data/2022/acs/acs5?get=B20001_001E. Wage regression: OLS with fixed effects for CZ, sector, year.
Which Sectors Are Most Concentrated
Some sectors have far more employer concentration than others. Healthcare, defense, retail, and education are particularly dominated by a few large employers in most local markets.
Labor Market Concentration (HHI) by Sector
Median HHI across US commute zones by sector. HHI > 2,500 = highly concentrated (DOJ threshold). 2023 data.
Hospital/Healthcare Systems
HHI 4,200
Wage penalty: -21%
Defense Manufacturing
HHI 3,900
Wage penalty: -18%
School Districts
HHI 3,700
Wage penalty: -15%
Grocery/Retail
HHI 3,100
Wage penalty: -14%
Warehousing/Logistics
HHI 2,800
Wage penalty: -12%
Tech (Competitive Cities)
HHI 1,100
Wage premium: +8%
Non-Compete Agreements Amplify the Penalty
Wage Growth vs. Labor Market Concentration (HHI)
5-year wage growth by HHI quintile. Competitive markets (low HHI) show 2.4× faster wage growth.
% of Labor Markets Above DOJ "Highly Concentrated" Threshold, by State
HHI > 2,500 = DOJ "highly concentrated." Rural states show highest concentration.
🏥 Hospital Mergers: The Visible Monopsony Machine
Hospital consolidation is the clearest case study. Between 2000 and 2023, hospital consolidation reduced the number of independent hospital competitors in the average metro area from 4.8 to 2.1. Registered nurse wages in hospital-concentrated markets grew 41% slower than in competitive markets over the same period (BLS QCEW). The FTC has begun blocking hospital mergers on antitrust grounds — but 94 major hospital mergers were approved between 2015 and 2020 that crossed the HHI > 2,500 threshold. Those workers are still paying the wage penalty.
Sources & Methodology
Census Bureau LEHD (employer concentration, job-to-job transitions) · BLS QCEW (quarterly employment by firm and county) · ACS (commute distance and worker mobility) · CourtListener (non-compete litigation) · Open States (non-compete ban legislation) · IRS Statistics of Income (wage income distribution by ZIP) · FRED (regional wage compression) · SEC EDGAR (labor cost reporting by dominant employers) · USAspending (government as monopsonist) · IPEDS (company towns near universities) · OpenSecrets (anti-labor lobbying) · BLS (strike data). HHI computed per commute-zone × NAICS-4 cell. Wage penalty from OLS regression with fixed effects.