Which phrase finishes this statement best? The net effect of a union increasing wages
A)is to lower non-union wages by an offsetting amount so national income is not changed.
B)is to increase wages in both union and non-union sectors.
C)is to misallocate labor toward non-union work unless unionization enhances union worker productivity by its actions.
D)is that no one gains in the end since union shops cannot compete and do not survive.

Question

Quizplus · Accepted Answer

The net effect of a union increasing wages can lead to a misallocation of labor towards non-union work unless the unionization also enhances the productivity of union workers. This is because higher wages in the union sector might push employers to hire more in the non-union sector where wages are lower, unless the higher wages in the union sector are justified by higher productivity.

Which Phrase Finishes This Statement Best? the Net Effect of a Union