Consider two labor markets, an eastern state and a western state, that enact different laws governing labor unions. The following graph illustrates the labor market for the state in the East. Initially, the market-clearing hourly wage is $12. Suppose that the government in this eastern state passes a law that makes it easier for workers to become union members. Through a process of collective bargaining, the union negotiates an hourly wage of $16. Use the black point (plus symbol) to show how many union workers will be employed at the $16 wage. (Hint: Be sure to place the point on the appropriate curve.)
Consider two labor markets, an eastern state and a western state, that enact different laws governing labor unions. The following graph illustrates the labor market for the state in the East. Initially, the market-clearing hourly wage is $12. Suppose that the government in this eastern state passes a law that makes it easier for workers to become union members. Through a process of collective bargaining, the union negotiates an hourly wage of $16. Use the black point (plus symbol) to show how many union workers will be employed at the $16 wage. (Hint: Be sure to place the point on the appropriate curve.)
Chapter10: Labor Markets And Income Distribution
Section: Chapter Questions
Problem 6SQP
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Transcribed Image Text:Consider two labor markets, an eastern state and a western state, that enact different laws governing labor unions.
The following graph illustrates the labor market for the state in the East. Initially, the market-clearing hourly wage is $12. Suppose that the
government in this eastern state passes a law that makes it easier for workers to become union members. Through a process of collective bargaining,
the union negotiates an hourly wage of $16.
Use the black point (plus symbol) to show how many union workers will be employed at the $16 wage. (Hint: Be sure to place the point on the
appropriate curve.)
Transcribed Image Text:WAGE (Dollars)
20
18
16
14
12
8
6
4
2
0
0
2
4
Labor Market in the East
I
11
Supply
Union Wage
Demand
6
8 10 12 14
LABOR (Millions of workers)
16
18 20
Union Negotiations
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