Question

Why are unions in industries in which inputs such as machines are poor substitutes for labor more likely to be able to bargain for wages higher than market levels?

Short answer

Unions seem to be more likely to succeed wage increases due to the scarcity of labour substitutes. Union workers can negotiate better wages and achieve self-interest because substitutes are scarce.

Step-by-step solution

Introduction.

An industrial union is a trade union that represents all workers in a specific industry, both skilled and unskilled.

A key tagline in manufacturing collectivism is "one shop, one union."

Given Information.

Due to the scarcity of labour replacements, unions are more likely to win wage increases. When there are no substitutes for labour, organized labor bargain for higher wages.

Explanation.

Employers have no choice but to accept higher wages because they cannot replace union members. As a result of the scarcity of substitutes, unions are able to bargain for higher wages and achieve their self-interest.