Final answer:
Labor unions bargain for wages higher than the current equilibrium wages in the market
Step-by-step explanation:
The goal of a labor union is to bargain for wages that are higher than the current equilibrium wages in the market. By collectively negotiating with employers, labor unions aim to secure better compensation and working conditions for their members.
For example, a union may negotiate higher wages through collective bargaining, resulting in a wage increase above the previous equilibrium wage. This can create an excess supply of labor for union jobs, as the quantity of labor supplied by workers who want those higher wages exceeds the quantity of labor demanded by firms.
However, it's important to note that higher wages negotiated by unions can also reduce firms' incentive to hire. The higher wages may lead firms to hire fewer union workers or find alternative strategies, such as purchasing inputs from nonunion producers or relocating to areas where unions are less influential.