Take a look at Figure 30.4. In that figure, we’re holding “job quality” or “working conditions” constant, and looking at how changes in wages impact the quantity of labor supplied and demanded. In many union negotiations, the union and its workers don’t push for higher wages. Instead, they push for better working conditions: safer machines, better insurance coverage, or cleaner restrooms.
So now let’s model this: Let’s hold wages constant, and look at how changes in working conditions impact the quantity supplied and quantity demanded of labor. Thus, set it up just like a real-life labor negotiation. Draw a conventional supply and demand chart, but on the vertical axis, just put “job quality—high or low” instead of “wage.” Then, show what happens to the amount of unemployment created when a union successfully negotiates a higher-than-equilibrium job quality.