Final answer:
Most unions find gain sharing plans insufficient as a total substitute for hourly wage gains, which is generally false. The proportion of U.S. workers with union-determined wages is lower than in most high-income countries due to various factors. Implicit contracts are sometimes used as an alternative form of wage-setting.
Step-by-step explanation:
Most unions do not consider gain sharing plans as an adequate substitute for traditional negotiated hourly wage gains in their labor contracts, so the statement given would generally be considered false. Gain sharing plans can be attractive to some workers, but they typically are not seen as a complete substitute for wage increases because they involve sharing cost savings and can be variable, while hourly wage gains are fixed and guaranteed. Additionally, when wages increase to levels such as $24 an hour, companies might invest more in capital equipment, which can lead to higher productivity but might also result in a reduction of the workforce needed.
The share of U.S. workers whose wages are determined by union bargaining is generally lower compared to most other high-income countries. Several factors contribute to this difference, including variations in labor laws, the political environment, cultural attitudes towards unions, and the structure of economies. In the United States, there has been a historical trend of declining union membership and, consequently, a decrease in unionized wage-setting.
Employers may also use an implicit contract as a form of wage-setting, which acts as a form of insurance against wage declines in bad times, at the cost of foregoing large wage increases during good economic periods.