In bargaining theories, what does eleasticity of demand for labor matter?
1. Suppose someone said to you that most bargaining theories are wrong because they assume that the elasticity of demand for labor influences bargaining power. This person claims that the elasticity of demand for labor has no effect on contract outcomes because, in practice, unions ignore the tradeoff between wages and employment. What do you think -- does the elasticity of demand for labor matter? Cite empirical evidence that supports your viewpoint.
2. Over the last 30 years union membership as a percentage of the workforce has grown substantially in Canada while declining steadily in the United States. Explain what kinds of data you could collect and how you could use that data to identify the factors that caused this difference in union growth.