Which statement about unions is TRUE?
A)Laws allow unions to discriminate on the basis of gender and ethnicity.
B)Unions bargain for better working conditions at the cost of higher wages.
C)Unions cause a surplus of labor by bargaining for wages that are higher than the value of the marginal product of labor.
D)Unions cause compensating differentials.

Question

Quizplus · Accepted Answer

Unions negotiate for higher wages than what might be determined by the market value of labor, which can lead to a surplus of labor because the higher wages attract more workers than there are jobs available. This does not necessarily mean the wages are higher than the marginal product of labor in all cases, but it can lead to imbalances in the labor market.

Which Statement About Unions Is TRUE