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Does WalMart Have the Right Idea?

Despite a friendly Congress and a pending labor bill, unions are under fire these days in Detroit and elsewhere — perhaps with good reason. A working paper by David Lee and Alexandre Mas finds that a successful unionization vote significantly decreases the market value of the company even absent changes in organizational performance. Lee and Mas run a policy simulation and conclude that, “ … a policy-induced doubling of unionization would lead to a 4.3 percent decrease in the equity value of all firms at risk of unionization.” [%comments]