When a union bargains successfully with employers, in that industry, unemployment decreases and wages increase
The Correct Answer and Explanation is:
The correct answer is: c. Unemployment decreases and wages increase.
When a union bargains successfully with employers, it typically results in higher wages and improved working conditions for employees within that industry. The bargaining power of a union gives workers the leverage to negotiate better pay and benefits, which often raises the wage floor across the industry. This leads to higher overall wages for employees covered by union agreements.
On the employment side, the outcome is a bit more complex. While the increase in wages may make it more expensive for employers to hire workers, unions also tend to push for job security measures, such as protection against layoffs or more stable employment conditions. In some cases, unions work with employers to create conditions that reduce turnover and increase long-term employment. This could lead to a decrease in unemployment in the industry as employees are more likely to retain their jobs.
However, there are also instances where higher wages might lead to fewer new hires or automation, especially in industries where labor costs are a significant part of production. But in the context of a successful union negotiation, where employers are also seeking to avoid labor disputes and maintain a productive workforce, it often results in both more stable employment and increased wages, thus decreasing unemployment and raising wages overall.
Furthermore, the union’s influence extends beyond just individual companies—it can establish higher standards for the industry as a whole, making it more difficult for employers to undercut wages or reduce staff in order to remain competitive. This creates a more level playing field, benefiting workers while reducing volatility in the job market.
