Woke Jobs After Dobbs?

In this guest blog post, Jason Sockin, a Postdoctoral Scholar at the IZA Institute of Labor Economics and former Economic Research Fellow at Glassdoor, highlights new research performed in conjunction with researchers at Indeed, the University of Southern California and the University of Maryland. 

Over fifty years ago, Milton Friedman argued that a company's only social responsibility is to maximize profits. Under this widely held view, companies should abstain from engaging with unrelated political and social causes. However, in an increasingly politically polarized social environment, companies are more frequently engaging in politically- and socially-controversial issues, including gun control, LGTBQ issues, climate change, and racial equality. Such engagement may serve as a meaningful signal of company culture for current or prospective workers who support such values, but could alienate those with differing viewpoints. This raises an important question: What are the consequences of employers making socio-political statements?

Following the June 24, 2022, Dobbs v. Jackson Supreme Court ruling, which overturned Roe v. Wade, hundreds of employers publicly announced policies covering out-of-state travel for abortions and related care. In a new paper, “We’ve Got You Covered: Employer and Employee Responses to Dobbs v. Jackson,” my coauthors, Pawel Adrjan, Svenja Gudell, Emily Nix, Allison Shrivastava, Evan Starr and I examine the labor market implications of these announcements. We first develop a comprehensive list of the companies that made these public declarations, building off the lists of leopard.fyi and Rhia Ventures. We then ask how employees and job seekers reacted by studying the evolution of reviews on Glassdoor, focusing on 6.5 million reviews submitted from 2019 through the first half of 2023, as well as 3 billion job seeker clicks on Indeed during this period.

To estimate the impact these announcements had on employees, we compare changes in job satisfaction within companies that made these announcements versus companies that did not. To ensure the non-announcing companies are as comparable as possible, we take each announcing company and identify the top 20 other companies that workers most commonly click on during a search session on Indeed. As an example, for the company Starbucks, we obtain the following 20 similar employers: Chipotle Mexican Grill, ALDI, Dunkin', McDonald's, Applebee's, Panera Bread, Buffalo Wild Wings, Old Navy, Safeway, Lowe's Home Improvement, Michaels, Barnes & Noble, PetSmart, Chili's, Bath & Body Works, Spencer's, Planet Fitness, Domino's, Five Below, Raising Cane's. Among this set of similar employers, we observe a number of fast-food service chains, but also retail stores.  

Given that employee sentiment is a strong predictor of turnover, job satisfaction is a key outcome for companies to care about. If sentiment improves following these public statements, then we might expect retention within the company to improve as well. If, however, workers respond adversely to their companies taking certain strong socio-political stances, then this could be a precursor to existing employees leaving the company. We first focus on the 1-5 star ratings workers provide about senior management and culture. Directly after the announcements, we observe a sharp and statistically significant decline of about 0.2 stars in employee satisfaction with management and culture for these companies that persists well into the post-announcement period (Figure 1).  This translates to an 8% decline. Since satisfaction falls, we anticipate some employees may leave the company. In fact, we observe that reviews for announcing employers are 4% more likely to be written by former employees after these announcements.

Which of the company’s employees have been most affected? We find that the increase in dissatisfaction is concentrated among reviews for male-dominated jobs, suggesting that men dislike these announcements more than women. When we turn to the free-response text workers write in their reviews (Table 1), we find suggestive evidence of what might be driving this decline: misalignment of political views. We find that the word "woke" shows up about 325% more often in the ‘Cons' section of reviews (where workers detail the negative aspects of their workplaces) for announcing companies compared with those for non-announcing companies. While this average deterioration in job satisfaction could be driven by a vocal minority who feel compelled to come forward after these announcements (the overall share of reviews that mention the word “woke” is only 0.04%), it nonetheless reflects disgruntlement by at least some of the company’s employees.

Table 1: Frequency of The Phrase `Woke’ After Companies Made These Announcements

Our findings highlight the challenges employers face when navigating politically polarizing issues. Here we have highlighted how these announcements caused current employees, especially those in male-dominated jobs, to give their companies lower evaluations. But it’s not all bad outcomes for these companies: Job seekers expressed more interest in working for them, especially those in more Democratic-leaning states. This suggests that even when companies wade into divisive issues, this can help them hire workers whose political views align with those of the company.

Going forward, what does this mean for companies, especially younger ones looking to enter and compete in the market? Will being a political actor help them stand out from competitors, or will all employers frequently taking political stances simply become the norm? Will entrepreneurs now need to weave a political strategy into their business model before launching their companies? As the United States becomes increasingly politically polarized, will companies need to pick a side? As politics has become ubiquitous outside of work, perhaps we’ve entered the era where it will become ubiquitous while at work.  

Pawel Adrjan is the Director of EMEA Economic Research at Indeed Hiring Lab, Svenja Gudell is Chief Economist at the Indeed Hiring Lab, Emily Nix is an Assistant Professor of Finance and Business Economics at the USC Marshall School of Business, Allison Shrivastava is an Associate Economist at Indeed Hiring Lab, Jason Sockin is a Postdoctoral Scholar at the IZA Institute of Labor Economics, and Evan Starr is an Associate Professor of Management & Organization at the Robert H. Smith School of Business at the University of Maryland.