Chapter 13

Unions and the Labor Market

Copyright © 2003 by Pearson Education, Inc. 13-2

Copyright © 2003 by Pearson Education, Inc. 13-3

Figure 13.1 Union Membership as a Percentage of All Workers, by Sector, United States, 1973–2000

Source: Barry T. Hirsch and David A. Macpherson, Union Membership and Earnings Data Book 2001 (Washington, D.C.: Bureau of National Affairs, 2001), Table 1.

Copyright © 2003 by Pearson Education, Inc. 13-4

Copyright © 2003 by Pearson Education, Inc. 13-5

Figure 13.2 Effects of Demand Growth and the Wage Elasticity of Demand on the Market Constraints Faced by Unions

Copyright © 2003 by Pearson Education, Inc. 13-6

Figure 13.3 Union Maximizes Utility Subject to the Constraint of the Labor Demand Curve

Copyright © 2003 by Pearson Education, Inc. 13-7

Figure 13.4 Employer Isoprofit Curves

Copyright © 2003 by Pearson Education, Inc. 13-8

Figure 13.5 The Contract Curve—The Locus of Efficient Contracts

Copyright © 2003 by Pearson Education, Inc. 13-9

Figure 13.6 The Demand for and Supply of Unionization

Copyright © 2003 by Pearson Education, Inc. 13-10

Copyright © 2003 by Pearson Education, Inc. 13-11

Figure 13.7 Hicks’s Bargaining Model and Expected Strike Length

Copyright © 2003 by Pearson Education, Inc. 13-12

Figure 13.8 Spillover Effects of Unions on Wages and Employment

Copyright © 2003 by Pearson Education, Inc. 13-13

Figure 13.9 Threat Effects of Unions on Wages and Employment in Nonunion Sector

Copyright © 2003 by Pearson Education, Inc. 13-14

Figure 13A.1 Utility Function for a Risk- Averse Party: Uncertainty about Arbitrator’s Decision Leads to a Contract Zone

Copyright © 2003 by Pearson Education, Inc. 13-15

Figure 13A.2 Increased Uncertainty about Arbitrator’s Decision Increases Size of the Contract Zone

Copyright © 2003 by Pearson Education, Inc. 13-16

Figure 13A.3 Utility Function for a Risk-Neutral Party: Contract Zone Is Reduced to a Single Point