Micro and Macro Economics Assignment Example | Topics and Well Written Essays - 500 words

Micro and Macro Economics - Assignment ExampleSo the jobless workers used to join the companies where there is no existence of the union. As the come in of employees increased in those nonunion companies, salary/wages used to get reduce. In this case the spillover effect is ($20-$10)/10*100= 100%Estimated Union Advantage with the Spill-Over core groupThe revised salary of the nonunion company is $10 where as new salary in the Union based company is $20. Although the spillover growth is showing a value of 100% growth in actual term, growth in the wages in the union based company is 33.33%.Increase at wages in Firm B The increase in the wages of trustworthy B is known as threat effect. Generally, companies where no union is present used to pay back this way to minimize the possibility of development of concept of union controlled labour system. Generally, the increase in wages is lesser in this companies compared to that of the unionized firms. As an example, in this example, the r ate of increase in the wage for firm A is 50% ($20 to $30) which is unionized whereas for B it is 25%. ($20 to $ 25)Union Advantage In firm A, the growth in wages are ($30-$20)/$20*100=50% whereas for firm b, which is a non-union firm growth in wages are ($25-$20)/$25*100= 20%. There is a clear difference of 5% in increase of wages between union and nonunion firm.Prevailing Wage can be delimitate as hourly wage system, usually added benefit and structured overtime compensation paid to the majority of the people belonging to working group deep down a particular area.