trade unions

• What is the primary focus of trade unions?

  To bargain for higher wages
• How do trade unions typically operate?

  Through collective bargaining
• What is meant by the term 'collective bargaining' in the context of trade unions?

  Negotiating on behalf of all workers
• What is a 'closed shop' trade union?

  One trade union has all the workers
• In the context of a closed shop, what role does the trade union assume?

  Monopoly supplier of labor
• What does the trade union control in a closed shop agreement?

  The labor supply at given wage rates
• In a competitive labor market diagram, what does the demand for labor equal?

  MRP
• In a competitive labor market, what determines the equilibrium wage and quantity of workers?

  Where demand equals supply
• What is the typical objective of a trade union regarding wages in a competitive market?

  To fight for higher wages
• How does a trade union alter the effective labor supply curve up to the point where the original supply curve intersects the trade union wage?

  It becomes horizontal
• What happens to the effective labor supply curve beyond the point where the original supply curve intersects the trade union wage?

  Reverts back to the original
• What is the most significant weapon trade unions utilize against employers?

  Organizing a big strike
• What is the impact of trade unions on wages compared to competitive outcomes?

  Wages are now higher
• What is the impact of trade unions on employment compared to competitive outcomes?

  Employment is much less
• What does the presence of trade unions in a labor market often lead to?

  Unemployment
• How do trade unions distort efficient labor market outcomes?

  By reducing employment for some workers
• What is one potential negative consequence of trade unions for firms?

  Raising costs for the firm
• According to the study material, what is the general consensus among economists regarding the efficiency of trade unions?

  They create an inefficient outcome
• In what type of labor market might trade unions improve outcomes?

  Monopsony labor market
• What potential benefits can trade unions bring to a monopsony labor market?

  Improve wages and increase employment
• What is union density?

  Proportion of workforce in a union
• What does a greater union density imply?

  Greater trade union power
• What does the 'union markup' tell us?

  Success of the trade union
• What does the union markup measure?

  Wage difference between union and non-union
• Since the 1970s, what has been the trend in real-world trade union power?

  Significantly limited
• What type of trade unions are now illegal?

  Closed shop trade unions
• For strike activity to take place, what action must be done in secret?

  Ballots
• What percentage of trade union members must agree for a strike to be legal?

  At least 75 percent
• What does the legislation say about striking against another employer?

  Not allowed
• What has happened to trade union membership since the 1970s?

  Much, much lower
• How has the UK economy restructured, impacting trade unions?

  Shift to service sector jobs
• What is a characteristic of service sector industries that impacts trade union activity?

  Lots of different employers
• What type of work has become more prevalent in the UK, making trade union organization harder?

  Part-time work
• How has globalization affected the power of firms regarding trade union demands?

  Increased firms power to reject demands
• What are the typical bargaining objectives of Trade Unions?

  • Higher Wages
  • Better working conditions