# Microeconomics (labour market, the union) question?

• dannysaf
In summary, the conversation discusses the goal of a union to maximize the total wage income received by union workers. The suggested approach to achieve this goal is to increase the union wage rate if labor demand is inelastic and decrease the wage rate if labor demand is elastic. The concept of elastic and inelastic demand is also explained, with inelastic demand meaning a fixed number of jobs regardless of pay, and elastic demand meaning more jobs created when wages are lower.
dannysaf
Suppose that a union's goal is to maximize the total wage income received by union workers, namely, the average union wage times the number of union workers employed. To achieve this goal, the union should:

A. Decrease the union wage rate if labor demand is inelastic and increase the wage rate if labor demand is elastic
B. Always decrease the union wage rate
C. Increase the union wage rate if labor demand is inelastic and decrease the wage rate if labor demand is elastic
D. Always increase the union wage rate

I guess, it's C, but really not sure!

Are you clear what elastic/inelastic labor demand means?

mgb_phys said:
Are you clear what elastic/inelastic labor demand means?

Of couse, but I'm not sure what they mean by total wage income !

C. Increase the union wage rate if labor demand is inelastic and decrease the wage rate if labor demand is elastic
total wage is just pay * number of workers

demand is inelastic - means the number of jobs is fixed whatever the pay.
demand is elastic - means there are more jobs created if the wages were less

mgb_phys said:
total wage is just pay * number of workers

demand is inelastic - means the number of jobs is fixed whatever the pay.
demand is elastic - means there are more jobs created if the wages were less

If demand is absolutly inelastic then the number of jobs is fixed whatever the pay. But here is just inelastic demand, so the number of jobs will vary, but on very small quantity!

## 1. What is the labour market?

The labour market refers to the interaction between employers and employees in the process of hiring and working. It includes the supply and demand for labour, wages, and the factors that influence employment, such as education, skills, and government policies.

## 2. How do unions affect the labour market?

Unions are organizations that represent groups of workers and negotiate with employers on their behalf. They can influence the labour market by bargaining for higher wages, better benefits, and improved working conditions for their members. This can lead to increased costs for employers and potentially impact employment levels and wages for non-unionized workers.

## 3. What is collective bargaining?

Collective bargaining is the process of negotiations between employers and unions to reach an agreement on working conditions, wages, and other employment-related issues. It is a key tool used by unions to advocate for their members and can have a significant impact on the labour market.

## 4. How do labour market policies impact the union movement?

Labor market policies, such as minimum wage laws and regulations on collective bargaining, can have a significant impact on the union movement. These policies can either support or hinder the ability of unions to negotiate on behalf of their members and influence the labour market.

## 5. What are some challenges faced by unions in the labour market?

Some challenges faced by unions in the labour market include declining membership, globalization, and technological advancements. These factors can make it difficult for unions to represent workers effectively and negotiate favorable terms with employers.

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