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Trivia Tidbit Of The Day: Part 497 - Right To Work States Perform Better Than Forced Unionization States.

Policies Matter-

The Bureau of Economic Analysis last week released economic growth numbers, on a state-by-state basis, for 2007. Some familiar patterns emerge, with a few outliers, as usual.

The general rule of thumb: Pro-growth states produce more growth. Pro-government states produce less growth. Pretty obvious stuff.

I decided to drill down a bit more, though.

I wondered what impact labor laws have on growth, so I looked at the total state economic growth (Gross State Product, or GSP), and compared it with whether a state is a Right To Work state or a Forced Unionization state.

Some fairly intuitive results (although this may shatter a left-winger's understanding of this subject):

From 2004-2007, no Right To Work state grew less than 5.1%, while fifteen Forced Unionization state grew below that level.

Meanwhile, while America's GDP growth from 2004-2007 by 8.4%, Right To Work states grew by 10% on average, while Forced Unionization states grew by only 6.2% on average. The median Right To Work growth rate was 9.2%, compared to the median Forced Unionization rate of 4.9% (the national median for all states was 7.3%).

Clearly, John Edwards was onto something back in 2003/2004 when he said there were Two Americas. Since that time, there is a pretty clear bifurcation of economic results, along labor law lines.

Unfortunately, as a friend and champion of union bosses, one of Edwards' more prominent prescriptions for the alleged Two Americas problem was to make all of us more like the Forced Unionization states.

That idea might reduce inequality, all right. It might very well eliminate the Two Americas. If John Edwards (or, for that matter, Barack Obama) had his way, we'd all have slower growth. But, hey, it would be fairer.

While not all Republicans at the state level are pro-growth, and not all Democrats are pro-regulation/pro-labor/pro-government, the trends generally follow the red/blue states we've come to know and love in recent years.

Clearly, letting labor union bosses write labor laws in a state retards economic growth. Why this bit of "duh" is so counterintuitive to some people is baffling to me.

If you'd like to check out the Microsoft Excel file with this data, you can look at the raw data (.xls) at the BEA site, or you can download the file I created here: (Excel Spreadsheet).

Previous Trivia Tidbit: Regulation & Entrepreneurialism.

Posted by Will Franklin · 9 June 2008 12:25 PM

Comments

Posted by: John at June 10, 2008 12:26 PM

Posted by: Scott Hedrick at June 10, 2008 01:20 PM

Posted by: Will Franklin at June 11, 2008 08:42 PM