Labor Unions

Since the foundation of the American Federation of Labor(AFL) in 1886, most unions in the United States have displayed a pragmatic out look, largely compatible with that of business. The general purpose of unions has been to protect and advance the wholesome being of workers, while that of business has been to promote the interests of stockholders. Higher requital and higher profits are compatible over the coherent run in a growing economy. Conflict does arise, however, from the event that in the short run higher wages for workers regard lower profits for shareholders. Power, too, is a matter of dispute. In the absence of unions, managers have a monopoly of billet over their employees. With unions on the scene, that power must be shared. The standard economic analysis of what gave a particular union the power to raise the pay and benefits of its members was propounded by the eminent English economist Alfred Marshall toward the end of the nineteenth century. Marshall theorized that the strength of a union depended upon four factors. First, withdraw for the product should be inelastic, so that there is little, if any, decline in sales in response to price amplifys.

Second, childbed be should be a small portion of the total be of production, so that a rather large increase in wages would generate only a small increase in the price of the product. Third, the supply of factors that can be use as varys for union grate, such as nonunion labor or labor-saving machinery, should be inelastic, so that their price rises substantially as more units are employed. Fourth, the ability of these factors to substitute for union labor should be highly limited; it would be hard to substitute for workers with very high skil! ls or skills that are highly specialized to a single employer. Numerous studies have been made to estimate the finis to which unions in the United States have raised the wages of their members supra what they would otherwise have been. These studies show... If you want to get a skillful essay, order it on our website: Orderessay

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