Micro 47 trade unions Flashcards
(17 cards)
define trade unions?
Trade unions are labour organisations that seek to promote the interests of their members.
What is the primary function of trade unions?
- Negotiate higher wages.
- Improve working conditions.
- Better job security.
What are the 2 forms of bargaining?
- Individual bargaining.
- Collective bargaining - Union negotiates with the govt on your behalf.
What is a monopoly seller of labour?
When all workers in an industry belong to a union.
Define closed shop?
When everyone is a part of a union.
(illegal in the UK).
Draw a diagram showing the impact on unemployment from unions?
ADD DIAGRAM PAGE 29
No supply at any point below W2 because workers won’t work - closed shop.
Does the impact of unions create allocative efficiency?
NO - excess supply of labour, unemployment would not happen in a free market.
What is a union mark up?
The percentage by which the wages of union members exceed the wages of non-union workers doing the same work.
Why is union mark up a problem?
People are getting paid above their MRP.
And everyone would join unions.
What impact does a closed shop have on elasticity of supply?
Makes it more inelastic: There is less supply of labour.
What does the effectiveness of trade unions depend on?
The type of market structure they are operating in.
What happens when a union attempts to raise wages in a competitive market?
Unemployment will increase because firms need to protect their profits, so costs cant increase.
What happens when a union attempts to raise wages in a monopolistic market?
Employment will not be affected and increase in wages will just eat up the monopolies profits.
finish page 32.
What are the 4 factors influencing a unions bargainig power?
- Elasticity of supply of labour - teachers cant be replaced so they can ask for higher wages.
- How destructive industrial action can be - strikes.
- Labour costs as a proportion of total costs - low labour costs means higher power.
- If demand for the product is price inelastic.
What proportion of the labour force is part of a union right now?
30%.
Fallen from 60% in the 80s.
What are the 3 reasons why unions memebership has fallen?
- Deindustrialisation - manufacturing sector was more dangerous and so workers needed to be protected.
- Regulation - closed shops were banned and laws around what you cant do when protesting.
- Globalisation - large supply of labour,
