4.5 Trade unions Flashcards
What is a trade union?
A group of workers who join together to maintain and improve their conditions of employment, including their pay.
What is collective bargaining?
A process whereby wage rates and other conditions of work are negotiated and agreed upon by unions and employers
Why is a trade union regarded as a monopoly supply of labour?
We regard a trade union as a monopoly supplier of labour, which is able to keep non members out of the labour market
What methods do trade unions have to influence employers?
Work to rule
Go slow
Overtime ban
Strike
What is work to rule?
When you work your hours and nothing else
What is go slow?
Take longer on all jobs
What is overtime ban?
Taking no extra shifts
What are strikes?
Refusing to work
What happens in a perfectly competitive labour market with a trade union?
Wage goes above equilibrium price. This then leads to excess supply. However employees will not work or not work effectively under the new price. This means employers have to employ at the new price.
In a monopsony labour market, what impact will a trade union have?
Wages rise. Due to the trade union, people will not work under the new wage level. This creates a kinked AC/supply curve.
