What is the "union threat effect"?
A) When non-unionized firms adopt a competitive pay rate in the labour market.
B) When non-union workplaces close their doors to previously unionized workers.
C) When non-union workplaces sporadically increase the wages of their employees.
D) When unionized workplaces aim for similar increases in negotiated wages.

Question

Quizplus · Accepted Answer

The "union threat effect" refers to the phenomenon where non-unionized firms raise their wages to match or come close to union wage levels in order to avoid unionization by their workers. This is done as a strategy to keep their workforce satisfied and reduce the incentive for them to unionize.

What Is the "Union Threat Effect