Final answer:
The decline in the percentage of workers belonging to unions has had an effect on the natural rate of unemployment.
Step-by-step explanation:
The decline in the percentage of workers belonging to unions has had an effect on the natural rate of unemployment. One possible explanation for this effect is the shift from manufacturing to service industries. Historically, unions were stronger in manufacturing, so as jobs shifted to the service sector, where unions had less influence, the percentage of workers belonging to unions decreased.
Another explanation is the force of globalization and increased competition from foreign producers. As companies faced global competition, they sought to cut costs, including labor costs, which led to a decrease in union membership.
In addition, the presence of workplace protection laws may have reduced the desire for unions. With workplace protection laws in place, some workers may feel that they have adequate protections without needing to belong to a union.