Do high profits imply low wages?

Summary It is argued in this paper that, contrary to what may be commonly believed, high wages are not inconsistent with monopsony power (neoclassical exploitation). In fact, it is argued, when a monopsonistic firm has economically profitable product-market monopoly power, which would seem to be the typical real world case, the firm's wages are expected to be high. Clearly, the situation described by the combination of profitable monopoly-monopsony conditions explains a high wage insofar as these conditions represent a profit opportunity which provides an incentive to pay a high wage and without which the high wages would not be offered or paid. Empirical evidence based on an exhaustive sample is offered which, although not over-whelmingly convincing, tends to support the theoretical arguments of this paper.