B. ECONOMICS OF LABOR UNIONS
So far we have looked at competitive labor markets. But labor unions, to which 16 million Americans belong, definitely have market power and may even serve as monopoly suppliers of labor. Unions negotiate coUective-bargaining agreements which specify who can fill different jobs, what they willbe paid, and _what the work rules are. And unions can decide to go on strike-withdraw their labor supply completely- in order to win a ‘better deal from an employer.
The study of unions is an important part of understanding the dynamics of labor markets. Although unions in the United States are le influential than theY once were, or’ than they ar in many other countries, one-seventh of the American workforce belongs to unions. Furthermore, in negotiating collective-bargaining contracts, unions raise i,ssues which are important to all workers, such as pensions, health-care benefits, and working hours.
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