Unformatted text preview: Wal-Mart: the high cost of low price Wagner Act of 1935 prevents employers from interfering when workers try to organize-National Labor Relations Board: (NLRB) is government agency that enforces workers right to unionize Good: gives markets power to workers Bad: Increases unemployment and distorts wages Ugly: like any political position there is an opportunity for corruption, union leaders can be bribed Efficiency Wages: Above equilibrium wages paid by firms to increase worker productivity 4 Reasons why this may be optimal 1) Worker health: better-paid worker have better nutrition and are healthier = more prod. 2) Worker turnover: higher wage – less likely to quit 3) Worker Quality: higher wages attract higher skilled workers 4) Worker effort: If caught shirking – will get fired. Higher wages=higher cost of losing job...
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- Spring '08
- Unemployment, efficiency wages, work Unemployment Rate, distorts wages Ugly