This paper suggests that a non-binding minimum wage may act as a focal point for tacit collusion in the low-wage markets, pulling down wages of some otherwise higher paid workers. A simple game-theoretic argument explaining the emergence of collusive equilibrium is developed, which is then...

In an effort to improve profits, employers sometimes collude in local labor markets. This has occurred recently in the markets for hardware and software engineers, digital animators, hospital nurses, and fashion models. The colluding employers restrict employment and thereby intend to depress...