Higher Wages and Other Union Goals Higher wages once dominated the list of union objectives, but more recent agreements have also focused on nonwage issues involving job security, health insurance, provision of child care, and job safety Unions such as the United Auto Workers have negotiated contracts under which members who are laid off will continue to receive payments nearly equal to the wages they earned while on the job They have also pushed hard for retirement pensions and for greater worker involvement in management decisions Union efforts to obtain higher wages have different effects on workers depending on the nature of the labor market When unions confront an employer with monopsony power, their task is clear: they seek a wage closer to MRP than the employer is paying If the labor market is a competitive one in which wages are determined by demand and supply, the union’s task is more difficult Increasing the wage requires either increasing the demand for labor or reducing the supply If the union merely achieves a higher wage in the absence of an increase in demand or a reduction in supply, then the higher wage will create a surplus of labor, or unemployment Increasing Demand The demand for labor in a competitive market is found by summing the MRP curves of individual firms Increasing demand thus requires increasing the marginal product of labor or raising the price of the good produced by labor Attributed to Libby Rittenberg and Timothy Tregarthen Saylor URL: http://www.saylor.org/books/ Saylor.org 764