Unions contribute to structural unemployment when collective bargaining results in wages:
A) above the equilibrium level.
B) below the minimum wage.
C) below the equilibrium level.
D) above the level of unemployment compensation.

Question

Quizplus · Accepted Answer

Unions can contribute to structural unemployment when they negotiate wages that are above the equilibrium level because employers may not be able to afford to hire as many workers at these higher wages, leading to a surplus of workers at the negotiated wage level.

Unions Contribute to Structural Unemployment When Collective Bargaining Results in Wages