More Value, More Bargaining? Unionization Campaigns and Industry Value Shocks

This paper examines how unionizing activity responds to industry value shocks. In the United States, workers petition the National Labor Relations Board for elections to determine unionization. I construct industry shocks using industry equity returns during the waiting period between petition and election. After negative industry shocks, workers are less likely to favor unionization, i.e., “less value, less bargaining.” This is consistent with workers fearing job loss, and higher state unemployment insurance mitigates this response. Surprisingly, there is no matching increase in unionization following positive shocks. Though counterintuitive, the asymmetric result is consistent with models of managerial resistance to unionization