When unions raise wages in one part of the economy, the supply of labor increases in other parts of the economy, which reduces wages in industries that are not unionized.

Question

Quizplus · Accepted Answer

When unions raise wages in one part of the economy, workers may be attracted to these higher-paying union jobs, leading to an oversupply of labor in non-unionized sectors. This oversupply can put downward pressure on wages in those sectors, as there are more workers competing for the same jobs.

When Unions Raise Wages in One Part of the Economy