Contemporary Labor Economics 9th Edition by Campbell Mcconnell, Stanley Brue, David Macpherson, Robert Powell, David Colander

Exercise 4

Comment on each of the following statements:
a. "Unions tie the hands of management and inhibit efficient decision making."
b. "Unions contribute to economic efficiency in that union wage pressure hastens the weeding out of the high-cost, least efficient producers in each industry."
c. "Although unions may reduce wage inequality, to the extent that they reduce wage differentials based on individual merit and effort, the outcome may be rightly perceived as both inequitable and inefficient."
d. "Unions impair the efficiency of our economy indirectly by diminishing profits and thereby reducing investment and economic expansion."