Discuss the Impact of Unions on Relative Wages (That Is

question 122

Essay

Discuss the impact of unions on relative wages (that is, compare the wages of union workers with those of nonunion workers).
As a result of union efforts to limit the supply of labor in certain industries, excluded workers have had to move to nonunion industries. The effect of these movements has been to raise wages in unionized industries and lower wages in nonunionized industries. There is a general consensus that unions have increased the relative wages of unionized workers by 15 to 20 percent.

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Definitions:

Simple Rate of Return

A calculation that measures the profitability of an investment as a percentage of the original investment, ignoring the time value of money and other factors like cash flows over time.

Annual Donut Sales

The total revenue generated from selling donuts in a one-year period.

Straight-Line Depreciation

An approach for spreading out the cost of a material asset through its operational life in consistent annual payments.

Payback Period

The length of time it takes for an investment to generate enough cash flow to recover the initial outlay, used in capital budgeting to estimate the viability of projects.