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Union Membership and Low-Income Families

Union Membership and Low-Income Families

Q On slide 23, why might unions have a negative effect on firm profits?

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In my view, Union has negative effects on the firms' performance and, thus, impacts wages and labor productivity. Union mainly tends to advocate its demand and therefore aims their demands to be fulfilled at any cost. It affects the firms' ability to make profit growth and advancement along with productivity. The existing business model is affected by the market structure; therefore, there is an urgent need to examine several indicators that affect an organization's performance. Unions May exert pressure on organization if the working conditions and employment practices are not flexible. In this way, we can say that it has a more negative effect on organization's profit rather than positive.