Big Labor and The Ultimate Anti-Stimulus Plan

President Obama and his advisers insist that they place national economic recovery over every other policy objective. However, when it comes to labor policy, they support measures that economic history indicates would significantly hinder such recovery, like the Employee Free Choice Act, the Lilly Ledbetter Fair Pay Act and the Public Safety Employer-Employee Cooperation Act.

Experience shows the link between increased unionization and reduced job and income growth. The ten states with the highest rates of private-sector union membership in 1997 had two-thirds less aggregate private-sector job growth by 2007 than did the ten states with the lowest rates. The ten most unionized states had only half as much real personal income growth as the ten least. Also, businesses prefer to locate in right-to-work states, where unions cannot enforce “closed shops” — that is, where union membership can't be made a precondition for employment, and where fewer employees tend to fall under monopoly bargaining power. Similarly, if card check increases unions’ power through the whole country, many businesses would have no choice but to relocate to other countries whose policies are less tilted in favor of monopolistic unionism.

If the new president and his allies in Congress are to succeed in reviving the economy, they must first do no harm. This will mean abandoning all such Big Labor schemes. Otherwise, what the stimulus plan could give, labor legislation will take away — and the economy will stay in recession.

Mallory Factor writing in the National Review Online.

HT: Stan Greer