What keeps CEOs up at night? Unions — organizations formed to help employees negotiate better salaries and working conditions. Sounds great… from the employee’s POV.

For an employer, one stat says it all. Per the US Bureau of Labor Statistics — union workers had 20% higher median weekly earnings of $1,144 vs. non-union workers (Reuters).

Anti-union: In 2021, just 10% of employees are unionized vs. 20% in 1983 — but efforts have picked up, with the National Labor Relations Board reporting the highest level of union organization in 10 years (CNN).

• Union workers are holding an election at an Amazon facility, and workers at a flagship AAPL retail store in New York are taking union actions.
• As of April 13, over 16 US Starbucks locations have unionized since last December — with 150+ stores holding elections.

Employers strongly oppose it, arguing that workers are better off having a direct relationship with the company, with no third parties involved.

Amazon reportedly banned the word “union” and other related words in its internal messaging app — and has been accused of intimidating workers.

Impact on stocks: According to the study Long-Run Impacts of Unions on Firms, the effects of unionizing vary widely — depending on the voting outcome:

• If the union wins by a small margin, there is barely any impact on stock prices.
• If the union wins by a large margin, the negative impact can be as much as 25-40%.

Unionization efforts would pressure companies via rising wages — which are already seeing impacts on management strategy:

• Amazon: Only four of 1000+ Amazon facilities with its stock barely moving on the news — but could create momentum for other locations to unionize.
• Starbucks: Raised wages twice in the past 18 months and suspended stock buybacks to direct part of the cash to employees.