If union workers in a given occupation are paid $20 per hour while nonunion workers receive $16 per hour,the measured union wage advantage is:

Question

Quizplus · Accepted Answer

To calculate the union wage advantage, we need to find the difference between the hourly wage rates of union and nonunion workers, and then express it as a percentage of the nonunion wage rate:

Union wage advantage = (Union wage rate - Nonunion wage rate)/Nonunion wage rate x 100%

Plugging in the given numbers, we get:

Union wage advantage = ($20 - $16)/$16 x 100%
Union wage advantage = $4/$16 x 100%
Union wage advantage = 25%

Therefore, the best choice is B, which represents a 25% union wage advantage.

If Union Workers in a Given Occupation Are Paid $20