Final answer:
The primary factor that affects the social cost of unions, according to economists, is their multifaceted impact on the competitiveness of firms, wage norms, and economic growth patterns. Unions neither unequivocally harm nor benefit economic performance across all countries, and cultural acceptance as well as the presence of monopsonies in labor markets can influence their roles in different economies.
Step-by-step explanation:
To economists, the social cost of unions depends primarily on various factors including their impact on firm competitiveness, wage determination, and overall economic growth. It is important to note that there is no clear pattern suggesting that unions cause firms to go bankrupt or help them become more competitive on a universal scale. Moreover, the presence of unions does not appear to correspond with the rate of economic growth in countries with higher percentages of unionized workers. Interestingly, while union membership figures vary by country, there can be significant impacts on non-union member wages due to union negotiations influencing overall market rates.
In some cases, where there is a monopsony in the labor market, the marginal cost of labor can influence the hiring practices of firms. The monopsonist, being the sole employer, may set wages freely, but must consider that hiring additional workers can increase the marginal cost beyond the wage rate due to the need to pay higher wages to both new and existing employees.
Cultural acceptance of unions and economic trends such as globalization also play roles. For instance, in the United States, there is nearly identical union membership and union coverage, indicating that members and non-members alike are often affected by union activities. Conversely, in other high-income economies, a non-member's wages might still be influenced by union activities, even if they aren't a part of the union.