When Workers Have Other Options: Rethinking Power in the Multi-Earner Economy
Monopsony, Meet Your Match: The Rise of Worker Options
I’ve been thinking a lot about something that doesn’t get enough attention in labor economics debates: what happens when workers can walk away more easily?
In my recent Hill column, I explored the connection between portable benefits, job lock, and worker power—noting how portable benefits are gaining momentum—with Senator Cassidy’s bill in the Senate, similar legislation in the House, and Senator Warner’s earlier efforts. But there’s a deeper story here about power and leverage that I want to unpack.
The Monopsony Problem
Let me start with a concept that sounds academic but is actually quite simple: monopsony power.
You’ve probably heard of a monopoly—when one seller dominates a market. Well, monopsony is the flip side: when one (or just a few) buyers dominate a market. In labor markets, that “buyer” is your employer. And when employers have monopsony power, they can pay you less than what your work is actually worth—because where else are you going to go?
Here’s the thing: you don’t need to live in a company town with one employer to experience monopsony power. It happens if the cost of leaving your job is too high. Maybe you need the health insurance. Maybe your skills are specialized to your current workplace. Maybe good alternative opportunities are too difficult to find. Whatever the reason, if switching jobs feels risky or difficult, an employer has more leverage over a worker—and that might show up as lower wages and/or fewer on-the-job amenities or worse conditions.
The Economic Policy Institute has documented this extensively. Their research shows that when workers face a 10% pay cut, only 20-30% actually quit. Meaning, if employers cut your pay by 10%, seven or eight out of ten workers stay anyway.
The Hidden Handcuffs
One of the biggest culprits? Employer-sponsored health insurance.
Survey data shows that 80% of workers cite employer-provided coverage as an ‘impactful’ reason when deciding to stay in their current job. In other surveys, 56% of workers said their health plan is why they remain with their employer. A 2021 West Health-Gallup survey found that among workers in households earning less than $48,000 a year, 28% answered “yes” to the question: “Are you currently in a job that you want to leave but don’t because you are afraid of losing your health insurance benefits?” Previous research has documented that for chronically ill workers reliant on employer-provided coverage, job mobility drops 40 percent.
Our entire tax code and regulatory structure favors employer-sponsored plans, making individual alternatives prohibitively expensive for most people. The Affordable Care Act created individual marketplaces, but it didn’t eliminate the structural advantages that make employer plans more affordable.
This creates what economists sometimes call “job lock”—you’re not staying because the job is great, you’re staying because leaving means losing benefits your family depends on. Other economists have studied this as “entrepreneurship lock”—a situation in which workers would pursue entrepreneurship but for their reliance on employer-provided benefits, particularly health insurance.
There are of course many other reasons you don’t want to leave your job—for example, you’re afraid that you won’t find other sources of income easily or the job market is not great right now.
Enter the Multi-Earner Economy
Now here’s where things get interesting.
More Americans are earning income from multiple sources—driving for Uber part-time, running an online business, freelancing, teaching on the side, doing high-level consulting. This isn’t necessarily about people being desperate for extra money (though for some it is). It’s about the fundamental structure of how people earn and think about household income. In the 20th century, it was one job or one career for your whole life. In today’s economy, jobs and careers are more fluid, and up to 60 million Americans are earning income from many different sources.
Of course, the experience varies widely—for some workers, juggling multiple jobs is exhausting necessity, not empowering choice. But for millions of others earning supplemental income by choice, the dynamics are different.
I’m starting to believe that this shift into the multi-earner economy is reducing monopsony power in ways we haven’t fully appreciated yet (not for all workers, but for many).
When you have multiple income streams, you’re simply less dependent on any single employer. If your full-time job cuts your pay or becomes untenable, you already have other revenue coming in—and you already have relationships with other clients or platforms. The cost of walking away drops dramatically.
That’s not theoretical leverage. That sounds more like real bargaining power.
Two Pieces of the Puzzle
This is where portable benefits fit into the picture—and why I think the current legislative momentum matters more than people realize.
Think about it as two complementary forces that could shift power toward workers:
1. Multi-earning directly reduces dependence
When you’re earning from multiple sources, no single employer controls your economic fate. You have options. You have fallback income. The exit costs are lower. This isn’t about everyone becoming full-time freelancers—most independent workers maintain a primary W-2 job and supplement their income. But that supplemental income changes the equation.
2. Portable benefits remove the handcuffs
If benefits weren’t tied to a single employer—if you could take your health insurance, retirement contributions, and other benefits with you—then the biggest barrier to job mobility disappears. You gain the freedom to move, negotiate, or pursue opportunities without risking your family’s healthcare or financial security.
Together, these two forces could fundamentally change the employer-employee dynamic.
Imagining a Different Labor Market
I want to be clear: the independent work system isn’t perfect. There are some independent contractors who are genuinely vulnerable and deserve thoughtful policy protections. This isn’t an argument that portable benefits solve all problems or that independent work is without challenges—I’m trying to understand the relationship of work for the majority of independent workers who choose (and are not forced) into independent work and who use it as supplemental income.
Right now, we have a system where benefits are controlled and granted by your employer. What if it wasn’t? What if workers had genuine freedom to leave, to negotiate, to explore better opportunities without the fear of losing those benefits?
That’s not just about making independent work more secure. It’s about giving all workers more leverage—because when people can walk away more easily, employers have to compete harder to keep them.
An Open Question
So here’s what I’ve been mulling over: if we see a movement toward a system of portable and flexible benefits (along with a continued growth in multi-earner economy), could we be looking at the first major shift in worker bargaining power in decades?
When workers aren’t locked in by benefits, and when they have other income opportunities readily available, does the balance finally tip?
I don’t have all the answers. But I think we’re at an inflection point where the right policy changes could unlock something powerful: a labor market where workers aren’t stuck, where mobility is real, and where having options isn’t a privilege—it’s the norm.
Whether this holds empirically remains an open question. Do workers in sectors with more multi-earning opportunities respond more strongly to wage changes? Do portable benefits laws drive reduced monopsony power? The answers would tell us if we’re seeing a structural shift or a limited phenomenon. But the theoretical case is strong: when workers have genuine exit options, bargaining power shifts. The question for policymakers is whether our institutions are suppressing options that workers and markets would otherwise create.