Final answer:
Unions negotiate for higher wages leading to an increased disparity in pay between their members and nonunion workers. Higher union wages can increase the supply of workers in the nonunionized sector, as companies might employ fewer unionized workers or outsource.
Step-by-step explanation:
Unions typically negotiate higher wages for their members, which can lead to increased wage disparities between unionized (insiders) and non-unionized (outsiders) workers. When unions demand and obtain higher wages, it tends to increase the wage in the unionized sector. As the section indicates, this may result in a decrease in employment within the unionized sector because companies might not replace retiring union workers, may hire less as they expand, or could outsource to nonunion producers. Consequently, those outside of the unions may find more opportunities, which increases the supply of workers in the nonunionized sector. Therefore, the correct answer to how unions tend to increase the disparity in pay between insiders and outsiders is: d) Increasing the wage in the unionized sector, which may create an increase in the supply of workers in the nonunionized sector.