Workers, Unions, and Takeovers

How do takeovers affect workers’ wages and job security in the short-run? What role does the labor union play in mitigating these effects? I answer these two questions by analyzing wage and employment outcomes of over 4,000 public firms that were acquired between 1981 and 2002, using establishment-l...

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Bibliographic Details
Published in:	Journal of labor research 2012-12, Vol.33 (4), p.443-460
Main Author:	Li, Xiaoyang
Format:	Article
Language:	eng
Subjects:	Acquisitions & mergers Airlines Census Censuses Employees Employment Employment security Industry Job security Labor policy Labor unions Law Ownership changes Private equity Social Sciences Studies Take-overs Trade unions U.S.A Wages Wages & salaries Workers
Online Access:	Get full text
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Summary:	How do takeovers affect workers’ wages and job security in the short-run? What role does the labor union play in mitigating these effects? I answer these two questions by analyzing wage and employment outcomes of over 4,000 public firms that were acquired between 1981 and 2002, using establishment-level data from the U.S. Census Bureau. I find that target establishments exhibit a net contraction in wages and employment, relative to comparable establishments after takeovers. Targets’ establishments in more unionized industries experience worse wage and employment outcomes after takeovers. These adverse effects are exacerbated when the establishment is located in a state with Right-to-work laws where unions face a less favorable bargaining environment. These findings indicate that target firms’ employees are negatively affected by takeovers and that their labor unions do not mitigate these negative effects.
ISSN:	0195-3613 1936-4768