Question

. The trade unions raise wages and increase employment in the overall economy.
Evaluate this statement if it is true, false, or uncertain.

Answer 1

• The answer is "uncertain".
• The trade unions bargain for raising wages and to improve working conditions in an industry. Usually, the unionised labourers tend to have more wages than non-unionosed labourers. Most of the times unions negotiate for high wages and pay settlements are performed accordingly. In reality, trade unions do not own the power to raise the wages, they can only bargain or threaten the employer for an increased wage. The work stoppages and other protests can also cause negative impacts on this situation.
• When companies are compelled to give high wages, they will experience a loss. This will cause the company to shut down or to reduce the number of labourers. As a result, there is a chance to increase the number of employment opportunities. However, we cannot conclude that trade unions cause unemployment. It is uncertain that how trade unions affect the employment levels and in raising wages.