IRE244H1 Lecture Notes - Lecture 9: Featherbedding, Nonunion, Albert Rees

• School: UTSG
• Department: Employment Relations, Centre for Industrial Relations and Human Resources
• Course: IRE244H1
• Professor: Frank Reid

Document Summary

Lecture 9 union impacts on ir outcomes. Gross wage differential (d) is defined as the percentage difference between the average wage of union and nonunion employees: Gross differential ignores the differences in the characteristics of union and nonunion employees (e. g. age, education, gender, region, etc) Also ignores impact of unions on nonunion wages. Bargaining power: u(cid:374)io(cid:374)"s a(cid:271)ilit(cid:455) to (cid:449)i(cid:374) i(cid:374)(cid:272)reased (cid:272)o(cid:373)pe(cid:374)satio(cid:374) depe(cid:374)ds o(cid:374) a(cid:271)ilit(cid:455) to i(cid:373)pose (cid:272)osts o(cid:374) employer through strikes or the threat of a strike. Given a downward sloping demand for labour, unions will be concerned about any negative employment effects of a wage increase that they negotiate. Elasticity of demand for labour defined as the percentage drop in employment for each one percent rise in wage rate. Union power is greater the lower the elasticity of demand for labour (i. e. steeper is the demand curve) because employment effects of a wage increase will be smaller. Deter(cid:373)i(cid:374)a(cid:374)ts of elasti(cid:272)it(cid:455) of de(cid:373)a(cid:374)d for la(cid:271)our (cid:894)marshall"s rules(cid:895)