Faces an own-wage elasticity of demand for labor

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Suppose that pilots’ union at a certain airline faces an own-wage elasticity of demand for labor of -0.15, and that the mechanics’ union at the same airline faces an own-wage elasticity of demand of -1.80. Suppose that the leaders of both unions push for a 15% increase in wages, but have no influence over employment levels. If the union leaders attain their goal, what will be the effects on the employment of pilots and mechanics? Explain the difference in these effects, and discuss which group is more likely to be pleased with the overall outcome of their union leaders’ campaign.

Reference no: EM131007848

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