Question

Assuming the wage-employment tradeoff exists, if labor in a particular geographic area is homogeneous and the unionized workers successfully negotiate a higher wage rate, then Group of answer choices nonunion workers will also experience an increase in their wages. nonunion workers will not be affected by what happens in the unionized labor market. the nonunion labor market will experience an increase in the number of workers, and this will cause wage rates to decrease in this market. nonunion workers will become members of the union that has just negotiated a wage increase because they want higher wages.

Answer 1

Answer:

the nonunion labor market will experience an increase in the number of workers, and this will cause wage rates to decrease in this market.

Explanation:

The wage-employment tradeoff refers to a theory that states that higher wages will only be accepted by employers when they can earn higher profits. If that doesn't occur, then higher wages will result in lower profits and therefore employers will higher less employees.

Basically higher wages generally result in lower number of employees.

In this case, unionized workers negotiated a higher wage rate, and therefore that will result in a reduction of total workers employed. Even though you generally need a just cause to fire a unionized worker, eventually the employer will find a just cause and no one will replace the fired employee.

Since the total number of unionized workers will eventually decrease, then the number of non-unionized workers will increase, increasing the labor supply and decreasing the equilibrium wage rate for non-unionized workers.