at the same time the less dispersed wages among union members indicate that such extensions may be associated with lower earnings inequality while empirical evidence also suggests that centralised as opposed to intermediate wage bargaining might be beneficial for both employment and income equality the level of bargaining is not under the immediate influence of policy makers these labour market effects have implications for income inequality the lower employment rate is likely to be associated with higher income inequality whereas the more compressed wage distribution to the extent that unemployment benefits are progressive or lowerincome workers are more likely to receive them has the opposite effect