a. Explain how a union of Wal-Mart’s employees would attempt to counteract Wal-Mart’s wage offers (a bilateral monopoly).
b. Explain the response by the Canadian Wal-Mart to the unionization of employees.
Today, Wal-Mart employs more people—1.7 million—than any other private employer in the world. With size comes power: Wal-Mart’s prices are lower and United Food and Commercial Workers International Union argues that Wal-Mart’s wages are also lower than its competitors. Last year, the workers at a Canadian outlet joined the union and Wal-Mart immediately shut the outlet. But does Wal-Mart behave any worse than its competitors? When it comes to payroll, Wal-Mart’s median hourly wage tracks the national median wage for general merchandise retail jobs