If the market for retail labor is competitive, explain the potential effect of a union on the wage rates. Draw a graph to illustrate your answer.
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