The definition of "labor market" is the market in which workers compete for jobs and employers compete for workers. In the labor market, workers' wages, benefits, and responsibilities are bought and sold. The factor that differentiates the labor market from other markets is the fact that the rule of supply and demand is not applicable. In the old days, workers (slaves) were bought and sold just like products and therefore the labor market and the product market showed important similarities. Since the establishment of human rights, the slave issue has been resolved and wages (and benefits) are used to compensate the worker's hourly work. Despite the increase in workers' rights, inequalities of power between employees and companies still persist. If you reflect on the definition of “labor market”, you can easily see the problem in the labor market. Companies are stronger; can determine the rules of work. Since companies are stronger and a single employee is defenseless against the entire company, new factors must be introduced into the equation to balance the difference in strength. The new factors are unions and collective bargaining. With unions, workers can unite and act forcefully to support demands. Employers, however, band together to form their own unions. In this framework, there is still an inequality in favor of employers. The workers united; however, they do not yet have the necessary tools or strength to negotiate their demands. Therefore, workers are given the option to strike as a tool, while employers are given the option of lockout. With the unions and the new tools, the context for collective bargaining is created. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay With collective bargaining, workers are stronger; workers form unions and unions make demands on employers for workers. It is clear that the union can obtain more for the worker than the individual worker requests. With collective bargaining, workers can go on strike to accept their demands. The individual worker does not have this possibility. The downside of collective bargaining is that individual needs are not taken into consideration. Even with collective bargaining, the requests of the majority of unions are taken into consideration. An individual worker may not want to strike; however, if the union decides to strike, the individual is forced to stop working and earning wages. With collective bargaining, the monthly salary, benefits and working hours are set on the negotiating table. Another downside of collective bargaining is the fact that both sides are equipped with extremely powerful weapons; strike and lockout. Any party with unacceptable demands may end negotiations and initiate the strike/lockout phase. Another negative effect of collective bargaining and unions is the fact that, if the union is strong, it can gain very substantial advantages over other unions in other sectors. Furthermore, unions have their own costs. The cost of unions and collective bargaining is shared by both workers and employers. Every month, the union dues are reduced by employers. Please note: this is just an example. Get a custom paper from our expert writers now. Get a custom essay In the existing method, wages and benefits come.