Is there a trade-off between wage increases for union members and employment? Explain.

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Maggie Strassburger · Accepted Answer

Final Answer : Yes, there is a trade-off. The increased wages result in a reduction in the number of workers employed. Evidence suggests that union members on average achieve a 15 percent wage advantage over nonunion workers. But a union's success in achieving above-equilibrium wages tends to be accompanied by a decline in the number of workers employed. That decline works as a restraining influence on union wage demands.

Is there a trade-off between wage increases for union members and employment? Explain.

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