The threat effect:
A)increases wages in the non-union sector
B)decreases wages in the non-union sector
C)increases productivity in the union sector
D)decreases productivity in the union sector
E)increases investment in the union sector

Question

Quizplus · Accepted Answer

The threat effect refers to the phenomenon where non-union employers raise wages to prevent their workers from unionizing, thus increasing wages in the non-union sector.

The Threat Effect