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

摘要

The theory of union wage effects deals with exactly what one would suspect. It looks at the effects unions have on wages both within the union sector, as well as effects in the nonunion sector. However, unions both directly and indirectly affect nonunion wage rates, and it can be extremely difficult to interpret the union-nonunion wage differentials. Beginning with a simple model of the labor market, there are initially two sectors, both of which hire similar workers. Both sectors in the model are nonunion, and as a result, mobility between the two is costless. Workers move between them until wages become equal in both sectors. For example, with the given demand curves Du and Dn, workers will move between sectors until the supply curves are S°u and S°n, respectively. The new equilibrium wage will be Wo and the employment levels will be E°u and E°n. Once one sector becomes unionized, however, its wages rise to W{sup}1u as is displayed in the figure below. What happens in the other sector depends on the response of employees in the nonunion sector. Using Cellular Automate, we simulate this complex system.