Which of the following is the most correct regarding the effects of unions on the wages and employment of non-union employees:
A)The crowding effect puts upward pressure on non-union wages.
B)The threat effect puts upward pressure on non-union wages.
C)The threat effect increases the level of employment of non-union employees.
D)Unions always lead to increased wages and levels of employment for non-union employees.
E)Unions never lead to increases in wage levels for non-union employees.

Question

Quizplus · Accepted Answer

The threat effect refers to non-union employers raising wages in order to prevent their employees from joining a union. This puts upward pressure on non-union wages. The crowding effect, however, refers to unions raising wages for their members which leads to a decrease in employment for non-union workers, so A and C are incorrect. D and E are also incorrect as the effects of unions on non-union employees are not always the same and depend on various factors.

Which of the Following Is the Most Correct Regarding the Effects