University:
McMaster University
Course:
ECON 1BA3 | Introductory Macroeconomics for Economics Students
Academic year:

2024
Views:

441

Pages:

1
Author:

Sabrina S.

Efficiency and Productivity •Do labour unions increase/decrease efficiency + productivity? Negative View There are 3 ways that unions have a negative impact on productivity + efficiency Losses via feainer-bedding and work rules. unions ran diminish productiu efficiency by restricting kinds of tasks workers can perform est, rules practices that prevent putting the most Productive workers in particular jobs resisting the introduction of output increasing. machinery equipment Positive View In some ways, unions make a positive impact on Productivity + efficiency The Shock effect (a longer-run positive impact) union achieves a wage increase Lohas a shool effect on other lioms In the long run. ether Pirms will: substitute capital for labsur implement productivity-increasing tech resulls in higher production costs (labour costs+) motirales employers to reduce costs and we more efficient. Losses via strikes when union management can't reach an agreement during negociations Reduced worker turnover resolve disputes Unions help workers -improve working conditions If workers are dissatisfied, they can xspond in 2 ways Strike Occurs Firm's production may cease for duration of strike firm forgees Salts + profit workers sacrifice income economy loses Output Exit Mechanism Cleaving job searching for ane ther ont Voice Mechanism Cost of strikes can be less if non-strike Pirms increase their Quiput to offset the loss of production by striking firms Lworkers communicate through unions to resolve grievances, BUT incy risk bring fired. Unions reduce wavutr jurnover in 2 wars Losses via labour misallocation -unions con reduce efficiency through the union wage advantage 1) Give workers the voice mechan. as a sulestilure for the coil mechan. 2) Higher wages mais unionised firms mort aliractive places to work refer to graphs: movement of workers to seca, reduses wage rates. -recall A46+C = loss of output in see i DE • gain in sec 2, Because A+BIC > D+e, there is a net loss in output Out because A:D and CTE, the not loss is aren B reduced worker furnover employers more willing to invest in training (productivity of workers) Increased informal training Unions insist on using seniority in matters such as Promotion & lay-off