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Wage Issues_Notes - I Wage Issues in CB Factors Influencing...

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I. Wage Issues in CB Factors Influencing Wage Determination: 1. Labor and product market conditions 2. Prices and Inflation 3. Legislation 4. Customs 5. Comparisons 6. Productivity Union’s Methods to Obtaining Higher Wages: 1. Bargaining Power 2. Patterns and spillovers 3. Controlling the Supply of labor - strict union security provisions - long apprenticeship programs - licensing and certification requirements - regulation of entrance requirements 4. Influencing the Demand of Labor - promoting “union-label” goods - supporting tariffs and opposing FTA’s - promoting the export of goods and services - supporting boycotts of non-union goods Two Arguments as to What shapes Unions Wage Policy Econ Arugment 1. Inverse relationship b/w wage and employment levels. i.e. John L. Lewis and UMW 2. U’s are most powerful when demand for labor is highly inelastic (not affected to changes in wage) - L is not easily replaced - L is a smaller share of TC - Demand for final product is inelastic - Supply of other factors is inelastic 3. Marshall’s conditions says there are econ constraints on the U’s ability raise wages, also some U’s are able to win larger increase than others. i.e. pilots, plumbers and baseball players have larger gains than clothing, farmers, and retail clerks.
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