Campaigns to make customers aware of the label "Made in the U.S.A. " were conceived and implemented by union leadership and not by the owners of the firms who manufacture the products. Use one of Marshall 's rules of derived demand to help you explain why a union might undertake such an advertising campaign? Specifically, what does the union hope to achieve?
Use Marshall's four rules of derived demand to explain the decline in the membership in the United Auto Workers. Specifically, how have the predicted determinants of the labor demand elasticity changed to adversely affect the demand for automobile workers.
Use your knowledge of the labor market to:
provide two reasons why the union wage gap overstates the union wage gain.
provide a reason why the union wage gap understates the union wage gain.
explain why high wage workers in a non-union firm would be more inclined to not support a union than those who are on the lower end of the pay scale.
Over the last 40 years, the estimated union wage gap in the private sector has increased from 10% to about 15%. Can this information help determine whether the spillover effect, which underestimates the union wage gain, is more or less important that the positive wage effect that is estimated for union workers as a result of the union being able to hire the most able workers? (Hint: use your knowledge of what has been happening to union coverage in the U.S. in the private sector during this time.)
Suppose one modeled union-wage negotiations as the following: the firm sets the wage while the union decides whether or not to strike. This model is opposite of that described in the text. In particular, the union has preferences over wages and strike duration, while the firm changes its wage with time (i.e., with strike duration). Describe the firm's optimal strategy. Can you think of a better name for the firm's behavior than the firm's resistance curve?
