Constructive Union Relations as a Mechanism to Lower the Wage-Setting Curve
A positive, collaborative relationship between a trade union and an employer can lead to a downward shift in the wage-setting (WS) curve. When employees perceive the employer's recognition of the union and willingness to compromise on wages as goodwill, their identification with the firm may increase, and the disutility of effort may decrease. This allows the firm to either achieve higher labor productivity or pay a lower wage for the same level of effort, effectively lowering the WS curve.
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Ch.2 Unemployment, wages, and inequality: Supply-side policies and institutions - The Economy 2.0 Macroeconomics @ CORE Econ
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