Monopsony Market Concentration and the Value of a Statistical Life in the Meat Production Industry

Abstract

The meatpacking industry is composed of over 500,000 workers in the United States as of 2021, according to the USDA. The majority of these workers are immigrants, refugees, and other vulnerable populations. Despite this large workforce, there are only four major companies that control over 85% of the U.S. meat production market: JBS, Cargill, Tyson Foods, and National Beef Packing Company. This concentration creates monopsonistic conditions in the labor market. As workers often have fewer employment opportunities, this limits workers’ outside work options and suppresses wage bargaining. Standard compensating differentials models typically assume that wages reflect occupational risk through the Value of Statistical Life (VSL). However, constraints faced by workers in a monopsony market, combined with structural constraints, such as immigration status, geographic immobility, and limited credential transferability, wage-risk adjustments fail to occur. In this paper, we examine whether concentrated labor markets in meatpacking lead to disproportionate workplace injury exposure without commensurate wage compensation, thereby misrepresenting the VSL model and raising significant health equity concerns.