Monopsonistic Labor Market

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Monopsonistic Labor Market

• And the effects of unions on labor markets

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Labor Union Basics
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Purpose of Labor Unions

• Allow higher pay.
• Better Hours.
• Improved working conditions.
• Job Security.

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Types of Unions

• Craft/Trade Unions American Federation of Labor
  (AFL) 1886
• Industrial Unions Congress of Industrial
  Organizations (CIO) 1935
• AFL-CIO 1955
• http//www.aflcio.org/aboutus/unions/

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Weapons of Labor

• Strike
• Picket
• Boycott
• Slow-down

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Weapons of Management

• Lockout
• Company Union
• Injunction (Government)
• Seizure (Government)

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More Tools used by Unions

• Competency test
• National Advertising Campaign
• State-Certification
• Increased Productivity
• Quotas/Tariffs on Foreign competition
• Wage increase over equilibrium
• Only union members hired/ Inclusive Unions

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ACT 4-4-2
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Act4-2-2
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Act4-4-2
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Act 4-4-2
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Act4-4-2
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Act 4-4-2
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Act 4-4-2
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Main Ideas of Act 4-5-1

• Which of the union goals has the most favorable
  impact on existing employers?
• Which of the union goals is most restrictive in
  the number of people who might want to enter the
  labor market?
• Which goal has the largest positive effect on the
  wage rate and number of laborers employed?
• Unions can increase wage levels and employment.
• Unions can cause unemployment in the labor market.

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Economic Rent

• Economic rent is the portion of earnings of a
  factor of production with a fixed supply that
  exceeds the minimum amount necessary to induce
  that factor to market.
• Taxing economic Rent?
• Jennifer Aniston and Economic Rent.
• Rent Seeking behavior.

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Act. 4-5-1
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Act 4-5-1