Sample Essay on Effects of Trade Unions on the Economy
Trade unions are effective tools for ensuring safety and good health in the work place largely because workplaces that are well organized are safe for the workers. It is precisely because of this reason that a large percentage of workers join trade unions and stay in them. These unions however have an impact on the economy which is often based on existent economic views.
There are economists who support trade unions while others don’t. There are those who are of the school of thought that the markets make rational decisions when it comes to price and wage allocation as such, they see trade unions as market distorters. However, there are others who believe the markets are not always fair or rational as such they deem trade unions a necessity.
What are the views?
There are supply side economists who view the market as a rational institution in terms of controlling economic life. Just in the same manner there is a market for beans and pork, they believe there is also a labor market and that workers are paid in accordance to what the market needs at any time.
These economists believe raising wages is distorting the market and inviting opportunities for unemployment. On the other side are demand economists who argue that unemployment is created by the markets and it does not use the skills that are available.
These economists believe that workers have a right to have their pay raised and employers should be forced to offer workers benefits and act in a fair manner. Demand economists also believe this aid in reduction of unemployment because of higher wages and it also helps in job creation.
Positive effects of trade unions
Those who argue about the significance of trade unions are interested in seeing demand stimulated by high wages. Economists Matthew Walters and Lawrence Mishel of Economic Policy Institute argue that trade unions increase wages by almost eighteen percent. Members of unions enjoy better benefits, health plans, pension plans and even time off. From a general stand point of view unions work superbly well for lower skilled workers and this helps eliminate inequality.
In addition to this, unions also improve benefits more markedly than wages and it all ends up increasing demand and improving the economic life of the trade union members. Those who support trade unions argue that the economic effect they have helps stimulate demand, creates contended workers and equalizes labor through proper management.
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