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EXPLANATION/ CHARACTERISTICS /
RESULTS
- To increase wages some unions try
to increase the demand for union labor
- To keep things simple assume a
competitive product market so Dlabor = MRP = VMP
- How? (See determinants of labor
demand lesson 12a)
- Increase demand for the
products they produce.
Example: unions lobby
governments for more government construction
projects
- Increase demand for union labor
by increasing the price of substitute resources
Example: unions
support increases in the minimum wage even though
union workers are already paid more than the minimum
wage
- Increase demand for union labor
by decreasing the price of complimentary resources
Example: trucking
unions support allowing more low wage foreign
agricultural workers to enter the country so that
there are more agricultural products to
haul
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