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From a competitive firms' point of view, the key question regarding the higher wages paid to union workers is whether the higher wage level is matched by non-union producers. can be passed on to its customers. leads to workers with more experience. is matched with higher productivity.

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From a competitive firms' point of view, the key question regarding the higher wages paid to union workers is whether the higher wage level is matched with higher productivity.

  • If management increases its investment in machinery in response to union demands for greater salaries, then union members may be more productive because they have access to better or more capital equipment than the average nonunion worker.
  • The company will need to make fewer hires, nevertheless.
  • A union can act like a monopoly and demand whatever salary rate it can get for its members because it is the only source of labor.
  • Employers must comply with the union's salary demand if they require workers.

What is Efficiency-Wage Theory?

According to the efficiency wage principle, employers should pay their employees well enough to encourage productivity and keep highly competent people on staff.

Learn more about Efficiency-Wage Theory brainly.com/question/13762885

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