Countervailing Claims: Pro-Diversity Responses to Stigma by Association Following the Unite the Right Rally

Abstract

Why do firms position on divisive social issues? I draw on theories of stigma by association to explain why firms’ mere proximity with controversial political actors may lead stakeholders to presume firms silent on social issues are misaligned with their sociopolitical preferences. These firms, in turn, countervail these presumptions of misalignment by eschewing silence and claiming sociopolitical positions. I substantiate this theory in the context of employee recruitment following the 2017 Unite the Right white supremacist rally in Charlottesville, Virginia. I show that Charlottesville’s employers combated presumptions that they shared demonstrators’ anti-diversity positions by making countervailing pro-diversity claims in their online job postings. In supplementary analysis, I show the rally was associated with a newfound wage premium among Charlottesville’s employers, but that this premium was lower in instances where employers made pro-diversity claims. This paper advances the idea of strategic sociopolitical positioning, whereby firms make calculated appeals to stakeholders.