Do Labor Unions Cause Price Inflation? A labor union is a group of people who work in the same kind of job, who group up to protect and extend their rights and interests. Price inflation is when the prices of items go up overtime because of inflation. 

Many people believe that labor unions cause price inflation because the pay of the workers increases, but really it is just the opposite. Labor unions do cause price inflation, but because the pay of the workers decreases. The employees push the employers to raise the prices of their items. The means that the employees get paid more with the extra money. A lot of times this doesn’t really work. If the price of products go up, then a customer might think that the product they want isn’t worth the money, so they go buy that same product somewhere cheaper. Then the company has less money than they had in the first place. This is bad for the company and the customer.