trade union Flashcards
1
Q
Trade unit analysis
A
-A trade union is a group of workers that work together in order to protect their interests.
-the actions of trade unions is to increase wages through collective bargaining
– And the diagram below in the absence of a trade union, the firm would hire Qc workers and pay them the rate of WRc
2
Q
analysts
A
- the effect of a trade union can force the wage rate up from WR1-WR2.
- union members will now only be prepared to work for WR2 or above.
-this effectively creates a new labour supply curve SLTU.
- this means that employment will fall from QL1-QL2 as some workers will benefit from higher wages and others will become unemployed.
- the wage increase is known as the trade u union mark up
- the quantity of workers employed is down by the difference between QL1-QL2
- a trade union can develop a monopoly in the supply of labour to a market and this can lead to market failure if there is an inefficient allocating of resources and a rise in production costs over and above the productively efficient level
