Union Bargaining Strategy Analysis

A powerful, nationwide union, whose wage agreements influence pay across a major industry, is negotiating a new contract. Despite having the leverage to demand a very large pay increase, the union's leadership opts for a more moderate demand. Which statement best analyzes the potential macroeconomic consequence the union is likely trying to avoid?

Comparing Rationales for Union Wage Moderation

A rational labor union with significant bargaining power will always push for the highest possible wage increase, as its sole objective is to maximize the immediate income of its current members.