Chapter 18, Problem 6DQ

To determine

To explain:

The reason why the union membership has declined as a share of private sector employment over the last fifty years in the U.S.

Concept introduction:

Competition in a market:

It is a way by which the existing firm in the market tries to have dominance in the market with a larger market share. The way of dominance depends on the quality, restrictive laws, and the price of goods provided to the consumers.

Explanation:

• The growth in the international trade over the years due to an increase in globalization is the major reason that could explain the decline in the membership as a share of private sector employment over the last fifty years in the U.S.

• The increase in the international trade has resulted in the smooth movements of labors across the countries. Professionals with better skills in the U.S. can easily get higher wage in other countries. So, there is no point to be dependent upon the union to get higher wage after union bargains it from the producers.

• Due to industrialization and globalization, the number of jobs in the U.S. have decreased. This is because the firm can easily get labors from other countries at a very low cost.

• It is completely different in the case of public jobs. People work in the public sector not for money, but for job security as the government departments never undergoes layoff and the work pressure is quite less. Salary is also very high in comparison to private sector job.

• In case of private sector jobs, if the negotiation between the unions and the employer fails, then the employee loses his job and the firm shuts down. So, there is no job security, and the salary is also very less. But this is not the case in the public sector, as the government always considers the demand of the employees.