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Tyler Murphy

Why does collective bargaining have the same general effect on unemployment as minimum wage - Washington ESD claim questions

I've been unemployed for 6 weeks now after my union job ended and I'm trying to understand something while dealing with Washington ESD. My economics professor mentioned that collective bargaining and minimum wage laws both tend to have similar effects on unemployment rates, but I never really got why. Now that I'm filing weekly claims and dealing with job search requirements, I'm seeing this play out in real time. Most of the union positions I'm finding pay way above minimum wage because of collective bargaining, but there seem to be fewer openings overall. Is this connected to what my professor was talking about? Also, does Washington ESD consider union jobs differently when evaluating job search efforts? I've been focusing on union positions since that's my background, but wondering if I should broaden my search.

Both collective bargaining and minimum wage laws create artificial price floors for labor - they set wages above what the market would naturally determine. When wages are artificially higher, employers demand less labor, which can lead to higher unemployment. For your Washington ESD job search, they don't specifically require union vs non-union jobs, but you do need to show you're making genuine efforts to find work. Document all your applications regardless of union status.

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That makes sense about the price floors. I've been logging everything in my job search activities, but wasn't sure if focusing mainly on union jobs would be seen as limiting my search too much.

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You're fine focusing on union jobs if that's where your skills are. Washington ESD just wants to see you're actively looking. Keep good records of your applications.

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the whole system is rigged anyway, unions drive up wages for some workers but then fewer people get hired overall. i've been trying to get through to Washington ESD for weeks about my claim status and can't even reach anyone to ask about job search requirements

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never heard of that, is it legit? i'm desperate at this point, been calling for hours every day

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From an economic perspective, both collective bargaining and minimum wage laws create what economists call 'wage rigidity.' When wages can't adjust downward during economic downturns, employment adjusts instead - meaning layoffs. This is why both can contribute to structural unemployment. For Washington ESD purposes, make sure you're meeting the work search requirements regardless of the wage level of jobs you're applying for.

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So it's not that unions or minimum wage are bad, it's just that they prevent wages from falling when demand for labor drops?

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Exactly. It's a trade-off - higher wages for those who keep jobs, but potentially fewer jobs overall. Both policies prioritize wage levels over employment levels.

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Wait I'm confused about my job search requirements too. Do I have to apply for jobs that pay less than what I was making? My union job paid $28/hour and most non-union positions are like $15-18. Washington ESD website isn't clear about this.

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For the first few weeks you can focus on jobs at your previous wage level, but eventually Washington ESD expects you to expand your search to include lower-paying positions if suitable work at your previous wage isn't available.

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How many weeks do I have before I need to start looking at lower-paying jobs? My adjudication just finished and I'm finally getting benefits.

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There's no specific timeline in the rules, but after 6-8 weeks they generally expect you to be more flexible on wages. Document your efforts though - that's key.

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This is exactly why I left my union job voluntarily - the writing was on the wall that layoffs were coming because our wages were so high compared to non-union shops. Now I'm on unemployment anyway and having to compete with everyone else. Should have seen this coming.

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Did you have any issues with Washington ESD since you left voluntarily? I thought that could disqualify you from benefits.

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I had to go through an eligibility interview, but since I could show the layoffs were imminent due to economic conditions, they approved my claim. Took about 3 weeks though.

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Both policies essentially set wages above equilibrium levels. In collective bargaining, unions negotiate higher wages than individual workers could get. With minimum wage, government sets a floor. Either way, if the wage is above what employers are willing to pay for that productivity level, some workers get priced out of jobs.

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so basically both make it harder for low-skilled workers to find jobs?

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That's one way to look at it. It can price out workers whose productivity doesn't justify the higher wage, making it harder for them to get hired.

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but unions also provide training and skill development that increases productivity, so it's not just about higher wages

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I've been dealing with Washington ESD for months and honestly the job search requirement is a joke. They don't really verify if you're actually applying or just going through the motions. As long as you log three contacts per week you're fine.

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That's not true - they do random audits and if you can't provide proof of your job search activities you can lose benefits. Don't risk it.

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maybe it varies by region? i've never been asked for proof in king county

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I'm being careful to document everything just in case. Better safe than sorry with Washington ESD.

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The connection between collective bargaining and minimum wage effects on unemployment is that both create 'insider-outsider' dynamics. Those with jobs (insiders) benefit from higher wages, while those seeking jobs (outsiders) face higher barriers to entry because employers can't offer lower wages to get them started.

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That's a really good way to think about it. I guess I'm an 'outsider' now trying to get back in.

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This is why entry-level positions are so hard to find in heavily unionized industries - the wage floor is too high for employers to justify hiring inexperienced workers.

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I used Claimyr when my weekly claim got stuck and I couldn't reach anyone at Washington ESD for two weeks. Worked great - got through to an agent in about 20 minutes instead of calling all day. The service connects you directly to available agents when they're free.

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how much does it cost? if it actually works i might try it

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It's worth it compared to the time you save. Check out their demo video to see how it works first.

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I was skeptical too but used it last week and got right through to resolve my adjudication issue. Much better than redialing constantly.

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Your professor was right - both policies reduce employment at the margin. Collective bargaining raises wages above competitive levels just like minimum wage does, so employers hire fewer workers. The difference is collective bargaining usually affects higher-skilled workers while minimum wage affects entry-level positions.

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So union workers typically have higher skills that justify higher wages anyway?

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Often yes, but collective bargaining can still push wages above what those skills would command in a competitive market. That's the whole point of collective action.

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been unemployed 4 months and finally starting to see this in action. all the good paying union jobs have long waiting lists, meanwhile fast food places are hiring at $20/hour because of minimum wage increases but those jobs barely exist anymore since they automated everything

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Automation is definitely a factor too. When labor costs go up artificially, employers have more incentive to replace workers with machines.

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exactly, seen it happen everywhere. higher wages sound good but not if the jobs disappear

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For Washington ESD job search purposes, focus on documenting genuine efforts regardless of the economic theory behind wage-setting. Apply to union jobs if that's your background, but be prepared to expand your search if benefits continue long-term. The key is showing active engagement in finding work.

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Thanks, that's practical advice. I'll keep focusing on union positions for now but start looking more broadly if nothing comes up soon.

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Good strategy. Washington ESD wants to see you're being realistic about your job prospects while also making genuine efforts.

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Both collective bargaining and minimum wage create deadweight loss in the labor market - wages above equilibrium mean some mutually beneficial transactions between employers and workers don't happen. This shows up as unemployment for workers whose productivity falls between the natural wage and the artificially higher wage.

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This is getting pretty technical but I think I understand - basically some people who would be worth hiring at $12/hour aren't worth hiring at $20/hour?

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Exactly. And those workers end up unemployed instead of employed at the lower wage they would have been willing to accept.

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I hate calling Washington ESD so much. Every time I need to check on something it's hours of busy signals. Someone mentioned Claimyr earlier - has anyone actually used it successfully?

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Yes, I mentioned it earlier and it definitely works. Saves tons of time compared to manual dialing. The demo at https://youtu.be/7DieNd3C7zQ shows exactly how it connects you.

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ok watching that video now. if this actually works it would be a game changer for dealing with Washington ESD

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The similarity between collective bargaining and minimum wage effects comes down to both preventing market-clearing wages. When wages can't adjust to balance supply and demand for labor, quantity adjustments happen instead - meaning unemployment. It's basic price theory applied to labor markets.

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This has been really helpful for understanding the economics. Now I just need to focus on actually finding a job that fits Washington ESD's requirements.

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Good luck with the job search. Remember to keep detailed records of all your applications and contacts for Washington ESD.

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As someone who's been through this process, I can confirm that Washington ESD generally allows you to focus on positions matching your skill level and previous wages initially, but they do expect flexibility over time. The economic theory is interesting, but practically speaking, document everything - job applications, networking contacts, interviews, etc. I'd suggest keeping a spreadsheet with dates, company names, positions applied for, and any responses. Also consider looking into apprenticeship programs or retraining opportunities if your union background isn't leading to quick placement - Washington ESD sometimes has programs that can help bridge you into related fields while you're collecting benefits.

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