While labor unions tend to negotiate above-equilibrium wage rates for their members, they also tend to reduce the quantity of labor hired.

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When unions negotiate higher wages, it increases the cost of labor for employers, which can lead to a decrease in the quantity of labor demanded. Employers may choose to hire fewer workers or reduce their hours to offset the higher costs. This is one of the reasons why some economists argue that unions can create unemployment, particularly in industries where they have a strong presence.

While Labor Unions Tend to Negotiate Above-Equilibrium Wage Rates for Their