The Impact of Labor Strikes on Consumer Demand: An Application to Professional Sports

摘要

The primary bargaining power of organized labor is its ability to withdraw labor from the firm in the form of a strike. From the workers' perspective, a strike is intended to impose substantial costs upon the firm. Over time, as these costs accumulate, the firm develops an appreciation of the solidarity of labor and may eventually surrender to the demands of the workers. Orley C. Ashenfelter and George E. Johnson (1969) note that the strike also serves the function of informing the workers to the reality of the firm's position. Although the union leadership may recognize early in negotiations that the firm cannot or will not meet the workers' demands, the rank and file of the union often do not understand the impracticality in their position until the workers have struck and the firm fails to surrender.