Question

6. Unions can affect the wage and employment of non-union sectors in various ways. Discuss the wages and employments for union sector and non-union sector with the following situations.

a. Union wage rate is higher than an ordinary market equilibrium wage rate. And labours who fail to get a position in the union sector will move to non-union sector.

b. Union wage rate is higher than an ordinary market equilibrium wage rate. And labours who fail to get a position in the union sector will stay on the union sector to find a job since union wage is higher than the rate of non-union sector.

c. Union wage rate is higher than an ordinary market equilibrium wage rate. And labours who fail to get a position in the union sector will move to the non-union sector. The non-union sector has two groups. Group one is able to organize unions and threatens to organize unions if wages are not increased. Group Two is not able to organize unions.

Answer 1

a) Labourers who fail to get position in union sector will move to non-union sector and but Unions will try to encourage the non-union labourers to talk formally with their employers to get wage rates equal to union labourers and even will assist them for how to organise and then how to peacefully represent their demand for higher wage rates but equal to union labour wage rates.

Union leaders will even encourage non-union labourers to participate in their meeting for how to be organised and even will make them aware of the contribution in terms of revenues and profit they are giving to their organisation and it is their every right to ask wage rates equal to union labourers and also will educate them about the laws which supports union activities and their rightful demands.

b) The labourers who fail to get a position in the union sector and who stay on union sector since wage rates of union sector are higher than non-union sector, in this case union's will encourage these labourers to first get job in non-union sector and then try to get equal wage rates from their employer vis a vis union wage rates and simultaneously look for opportunities within union sector and as and when they get the opportunity to move on to union sector grab that opportunity immediately.

This strategy will encourage non-union labourers to be employed in order to earn wages and simultaneously represent their demand with they employers for the wage rates equal to union wage rates and also to keep trying to get jobs in union sector and grab that opportunity as and when they get the same.

c) Labourers who fail to get position in union sector and move to non-union sector and non-union sector has two groups, one who can organise and can also threatens to organise unions if wages are not increased and second one is not able to organise unions, so in that case union will encourage and educate the first group for how to put their demands peacefully and in written and also will make them aware of the laws which is made for them in order to represent their demand in a more sound way and will also invite them to their meetings and then ask them to encourage the Group-2 to support them even if passively in order to give benefits of high wage rates and equal to union wage rates to all type of labourers, i.e. group-1 & group-2.

Union will encourage group 1 to give them feedback with response of their employer of their demands and then will try to give them further course of action which can be taken in order to fulfil their demands.