Unions' Wage-Setting Coordination Boosts Profits, Divides Workers
In a market where a few big companies sell products, the workers' unions want to work together on wages. They can't merge completely, so they might use a tactic called "wage leadership" where one union kind of leads the way on setting wages. When unions use "wage leadership," they all end up better off. But, the wages and jobs may not be the same for all companies or unions. In companies following the wage leader, jobs might increase while the wage-leader's jobs could fall. This difference in job levels could create challenges when using "wage leadership."