Question

What are the costs and benefits for management of allowing the union to decide how the economic package should be divided?

Answer 1

Unions have a substantial impact on the compensation and work lives of both unionized and non-unionized workers. Unions raise wages of unionized workers by roughly 20% and raise compensation, including both wages and benefits, by about 28%. Unions reduce wage inequality because they raise wages more for low- and middle-wage workers than for higher-wage workers, more for blue-collar than for white-collar workers, and more for workers who do not have a college degree.