Would you expect the presence of labor unions to lead to higher or lower pay for worker members? Would you expect a higher or lower quantity of workers hired by those employers? Explain briefly.
I would expect the presence of labor unions to lead to high pay for worker members. Labor unions can negotiate favorable pay wages and terms. Also, when workers are in a union, they can unite and bargain for better pay and terms. I would expect labor unions to lower the quantity of workers since there would be more costs for the cost of employees. This would lead to some companies adopting automation or being too selective when hiring.
What are the main causes of the recent trends in union membership rates in the United States? Why are union rates lower in the United States than in many other developed countries?
Some factors leading to the recent trends in union membership rates in the United States include anti-union campaigns, such as intimidation from some companies, which discourage workers from joining unions. Some workers may also have the opinion that unions are for traditional jobs and are not helpful in the current world. Other factors include legal changes, which make it challenging for unions to maintain workers, and economic changes, which have changed the United States from a manufacturing hub. This sector was widely involved with labor unions. Union rates are lower in the United States because of various factors, including political, legal, and cultural factors. Politically, the United States does not support union membership, which impacts the legal frameworks. Current legal frameworks are less supportive. Culturally, the United States lacks labor solidarity.
What is a monopsony?
Monopsony is defined as a market structure where there is only a single buyer for a specific product or service offered by several sellers. Such buyers have high market power and can influence the price and quantity of the product or service involved.
What is the marginal cost of labor?
The marginal cost of labor is the additional cost or expenses that an employer incurs when hiring one more unit of labor, in most cases, an additional employee. The marginal cost helps firms understand the optimal level of employment of a company as they seek to keep the marginal cost lower than the additional revenue generated by the extra worker.
How does monopsony affect the equilibrium wage and employment levels?
A monopsony market lowers the wage level as the employers can set the employee wages. The wages are lower than the wages that could be set in a competitive market. Besides, such employers would hire fewer workers as they face an upward-sloping supply curve of labor.
What is a bilateral monopoly?
A bilateral monopoly is when a single product or service buyer has a single seller. The seller acts as a monopoly, seeking to gain high prices from the buyer, and the buyer seeks ways to pay low prices. Each of the parties has significant negotiating power.
How does a bilateral monopoly affect the equilibrium wage and employment levels compared to a perfectly competitive labor market?
Wages in a bilateral monopoly are determined through negotiations between the two parties, as they both have high negotiating power. Unlike in a perfectly competitive market where wages depend on demand and supply forces, such wages are influenced by the relative bargaining strength of the teams and the willingness of the buyer. The number of workers hired depends on the agreement between the two parties, unlike in a competitive labor market. Such negotiations may also lead to less efficiency.
Describe how the earnings gap between men and women has evolved in recent decades.
Traditionally, women were only involved in traditional roles and low-paying jobs. The gender pay gap was huge until around the 1970s when legal and societal changes led to several women joining the workforce and accessing higher education, which opened several career opportunities for women. Nevertheless, the pay gap persisted as there were limits to women getting job positions. Recently, the gender pay gap has been proven to narrow, but women are still the majority in low-paying jobs and are usually not represented in high-paying jobs.