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Labour Market Institutions
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Trade unions (1) What are trade unions? Trade unions refer to employee organization, which represent groups of workers on a collective basis. Trade unions bargain collectively on behalf of their members thereby increasing the bargaining power of individual workers in wage negotiation (2) How are trade unions organised? Trade unions are organised along general industrial and craft lines, but increasingly super unions are being formed along industry and even single enterprise lines with increasing coverage and bargaining power in wage negotiation. (3) How do trade unions influence labour market outcomes? Trade unions can influence market outcomes in two main ways 1. If unions can restrict the supply of labour to only unionized workers, this will cause a shift in the supply curve to the left as illustrated in Figure A forcing up the wage rate but reducing the quantity of labour employed to only union members 2. a Trade Union or the union movement in general may attempt to raise wage levels above market equilibrium or market clearing levels as in Figure B [creates wage floor] Employer Association (4) What is the role of employer association?
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