The conditions under which trade unions can raise wages are the following:
(a) When wages are less than the marginal revenue productivity of labour, trade union can get wages raised up to the level of their marginal revenue productivity.
(b) When higher wages results in raising productivity, the MRP curve of labour shifts to the right. In this situation, it is possible for the employers and trade unions to maintain the higher level of wage rate.
(c) If the increase in costs due to higher wages can be passed on to the consumers in form of higher prices of the commodities, trade unions can raise the wages.
(d) When the industry is earning abnormal profits, wages may be raised.
(e) If the demand for a particular type of labour in an industry is inelastic, trade unions can easily get the wages raised.
