Question

A number of studies find positive relationship between nonunion wages and industry union density. The higher industry union density, the higher the nonunion members are getting paid. This is the evidence for _________effect in the academic literature.

Question 39 options:

	product market
	the spillover
	progressive compensation
	threat

Answer 1

The answer is d: Threat effect

The non unionized members are getting highly paid when the density of the industry union increases. This is due to the threat for the unionization which the employers feel in the industry.

The product market threat is an incorrect solution as the compensation, payment, etc cannot be considered as a product market. The product market threat doesn’t impact the union density or the nonunionized payment.

The option spill over threat is the threat which the organization face due to the ripple effects of the unrelated events which happens in the industry. Hence, it is not related to unionization.

The option progressive compensation is the pay which is given to the employee in order to make changes in the employee rate, performance etc. Hence, it is also not related to unionization.