The union pay advantage causes employers to use less labor and more capital per worker than they would otherwise,which reduces efficiency across society.

Question

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The union pay advantage refers to when unions negotiate higher wages for their members, which can lead employers to replace workers with machines or outsource jobs to countries with lower labor costs. This can decrease efficiency across society as the use of capital per worker increases, while the use of labor decreases.

The Union Pay Advantage Causes Employers to Use Less Labor