Can someone please explain the economic impact of unions on efficiency and productivity?

Question

Please provide a detailed example.

Answer 1

Impact is negative.

Normally, pay rate, promotions and threat of losing a job are effective tools to ensure the worker performs to their best ability.

Labor unions eliminate these incentives, leaving worker with no reason to put in more effort than average. And since nobody works above average, the average begins to decline.

If you need an example, compare American and Japanese cars.