The article explores how giving subsidies for creating new jobs can influence the behavior of trade unions and firms. By offering rewards only for increasing employment, firms are less hesitant to lay off workers when unions demand higher wages. This leads to lower wage demands by unions, more jobs, and better overall welfare. With moderate subsidies, unions are more likely to keep wage demands in check. However, if subsidies are too high, some unions may push for higher wages, causing some firms to shrink and potentially harm employment and welfare.