Final answer:
Through collective bargaining, union representatives negotiate wages, hours, and working conditions with employers. Union presence often leads to higher wages than the market equilibrium, but could also cause an oversupply of labor. Unions work to balance the needs of workers with the demands of the marketplace.
Step-by-step explanation:
Through collective bargaining, union representatives negotiate between employers and employees on issues such as wages, hours, and working conditions. When company management refused to meet with representatives representing over 350,000 workers who were advocating for shorter hours and a living wage, a strike ensued. Empowering employees to unite and negotiate is essential; otherwise, they may be subject to long hours (14-16 hours daily) at low wages, with restricted rights to unionize for the advocacy of worker rights and safety.
As illustrated in Figure 14.12 Union Wage Negotiations, without a union, workers would face a market equilibrium wage (We) dictated solely by supply and demand. However, the presence of a union allows for a higher negotiated wage (Wu), though it may result in an excess supply of labor (Qs) over what firms demand (Qd) due to the raised wages. Additionally, historical evidence such as the situation during World War II shows the dedication of unionized workers, who agreed to measures like foregoing vacations to maintain production, indicating the collective commitment to larger goals beyond personal benefits.
A labor union serves as a negotiation entity, striving for better compensation and work environments, leading to union workers generally enjoying higher pay compared to non-unionized counterparts. However, changing economic landscapes and legal frameworks have been influencing union membership trends and the bargaining landscape in the U.S.