A union wage advantage is less likely to occur where:

Question

Quizplus · Accepted Answer

A union wage advantage is less likely to occur when only a few firms within a competitive industry are unionized. In a competitive industry, firms cannot pass on higher labor costs to consumers in the form of higher prices. Therefore, non-union firms may be able to maintain their market share by keeping their labor costs lower. Additionally, if only a few firms within the industry are unionized, there may not be enough collective bargaining power to negotiate significantly higher wages.

A Union Wage Advantage Is Less Likely to Occur Where