Final answer:
Higher wages influenced by a labor-union can lead to changes in a firm's profitability, thus affecting non-employee shareholder wealth, depending on whether the wage increase is counterbalanced by heightened productivity or other cost-saving measures.
Step-by-step explanation:
If a labor-union sponsored pension plan has a significant equity stake in a firm and uses its shares to influence corporate decisions in favor of employees, this could have various impacts on the wealth of non-employee shareholders. On the one hand, if higher wages for unionized workers lead to increased productivity, the firm may be able to afford these wages without detriment to profitability. Consequently, there may be no negative impact on non-employee shareholders. However, if higher wages do not translate to an increase in productivity, this could result in lower profits or even losses for the firm, potentially harming the wealth of non-employee shareholders as the firm's value could decrease.
Moreover, a firm may respond differently to high union wages; they might reduce hiring, buy inputs from nonunion sources, or move to lower-wage areas, which can impact long-term business strategy and profitability. This complex interaction between union activities and shareholder interests highlights the careful balancing act that firms must achieve to satisfy both workers and investors.