A Simulation of the Theory of Union Wage Effects Using Cellular Automata

摘要

The theory of union wage effects deals with exactly whatrnone would suspect. It looks at the effects unions have onrnwages both within the union sector, as well as effects inrnthe nonunion sector. However, unions both directly andrnindirectly affect nonunion wage rates, and it can bernextremely difficult to interpret the union-nonunion wagerndifferentials. Beginning with a simple model of the laborrnmarket, there are initially two sectors, both of which hirernsimilar workers. Both sectors in the model are nonunion,rnand as a result, mobility between the two is costless.rnWorkers move between them until wages become equal inrnboth sectors. For example, with the given demand curvesrnDu and Dn, workers will move between sectors until thernsupply curves are S°u and S°n, respectively. The newrnequilibrium wage will be Wo and the employment levelsrnwill be E°u and E°n. Once one sector becomes unionized,rnhowever, its wages rise to W1u, as is displayed in thernfigure below. What happens in the other sector depends onrnthe response of employees in the nonunion sector. UsingrnCellular Automate, we simulate this complex system.