Monday, May 11, 2009

Low (High) Union = High (Low) Employment Growth

From 2003 to 2008, for example, aggregate private-sector employment grew by a healthy 10.4% in the 11 states in which fewer than 5% of private employees were under union
monopoly control as of 2003. In the 18 states with private-sector monopoly bargaining below the national average, but above 5%, employment grew by 6.1%. But in the 21 states with above average private-sector unionization, aggregate employment grew by just 3.5% -- roughly a third as much as in the lowest-union-density states.


Link.

27 Comments:

At 5/11/2009 11:52 AM, Blogger Walt G. said...

Does a chart like this really exist at the U.S. Labor Department, which is cited as the graph source? It looks as if someone analyzed data (possibly even legitimate data) and inserted emotional trigger words like “monopoly” to bias the readers’ opinion in a right-to-work propaganda article.

 
At 5/11/2009 12:10 PM, Anonymous Anonymous said...

To Walt G --

Of course, the Labor Department does not look at how much private sector employment increases over time in states grouped as this chart does.

However, the Labor Department does provide private-sector job totals for all 50 states in 2003 and
2008. And the web site http://unionstats.com -- maintained by labor economists Barry Hirsch and David Macpherson -- does tell us what share of private-sector workers were unionized in each of the 50 states in 2003.

You combine the Labor Department data and the Hirsch-Macpherson data, and the chart is what you get. The info looks pretty bad for Big Labor -- even if you use "neutral" terms like exclusive union bargaining rather than monopoly bargaining.

Stan Greer (the chart creator)
National Right to Work Committee
National Institute for Labor Relations Research

 
At 5/11/2009 12:26 PM, Anonymous Machiavelli999 said...

This is an example of mistaking correlation for causation.

Unionization is especially strong in the industrial heartland of America. That industrial base is dying but not because of unionization. We could have had no unions and those industrial jobs would have still been outsourced.

So, because unions are associated with industries that are in decline in America, it seems that unions are a cause of poor job growth. Workers in Vegas have a relatively high union rate. Has Vegas had trouble with growth the last few decades???

 
At 5/11/2009 12:46 PM, Blogger stilettoheels said...

The info looks pretty bad for Big Labor -- even if you use "neutral" terms like exclusive union bargaining rather than monopoly bargaining. Hardly, Stan.

Put up population growth beside the 3 box charts and then we will discuss the issue.

Stan is confusing the employment/population growth rate (primarily Texas, Florida, Arizona and the Carolinas) which are low union states with private sector job growth.

The Hirsch/MacPherson data base is here.

 
At 5/11/2009 12:56 PM, Blogger 1 said...

"Unionization is especially strong in the industrial heartland of America"..

What heartland part of America are you talking about? Which states?

Here in Missouri the membership numbers in unions has gone down since 1980...

"That industrial base is dying but not because of unionization"...

And you know this how? Mind you I'm not totally disagreeing with you since the heavy hand of federal government has a large dose of blame coming its way due to fascist tactics of the EPA...

"Has Vegas had trouble with growth the last few decades???"...

Hmmm, are these signs of growth?

I think its a mixed bag...

From the Jul. 30, 2008 of the Review Journal: Index: Local economy shows signs of declineReport: Las Vegas tourism tumbles 11.9 percent in JanuaryREAL ESTATE: Las Vegas home sales soar by 78 percent - Median price falls by nearly 40 percent

 
At 5/11/2009 1:00 PM, Blogger happyjuggler0 said...

Machiavelli999,

Your statement of That industrial base is dying but not because of unionization is not supported by the facts.

This article shows that in the manufacturing sector, that right to work states fare significantly better than "union monopoly" states.

Also, this link shows that your statement that the US industrial base is dying is simply wrong. The US industrial base is still growing (excepting recessions...recession bars on your charts would be great Professor Perry). The "problem" is that manufacturing productivity is increasing year in, year out, but the growth in manufacturing consumption isn't keeping up with that productivity growth. Therefore the inescapable conclusion* is that employment in the manufacturing sector has to decline so long as citizens prefer to consume services as a larger percentage of their purchases.

*Actually if manufacturing export growth grew at a fast enough rate, then in theory that might be enough to overturn the decline in manufacturing employment. However, even though the US exports more than any other country in the world, it isn't enough.

 
At 5/11/2009 1:16 PM, Anonymous Anonymous said...

Interesting discussion here.

Let me add to the pro-Right to Work comments:

The Right to Work state job growth advantage is evident within regions of the country: Job growth in western Right to Work states is far greater than it is in western non-Right to Work states, even though neither group of states is especially industrialized. Job growth in the Right to Work states in the Southeast, which are still fairly heavily industrialized, is far superior to job growth in non-Right to Work states in the Northeast, which deindustrialized decades ago.

The problems non-Right to Work states have can't be explained away by their dependence on manufacturing, which hasn't been a major factor for a long time for slow growth states like New York, New Jersey, and the New England states. These states' growth in private-sector service jobs is also pathetic.

And of course, the reason population growth in Right to Work states is greater is largely because job growth is greater. To be more precise, Right to Work states simultaneously attract ambitious workers because they attract businesses, and attract businesses because they attract ambitious workers. It's a classic example of synergy.

More info available at www.nilrr.org -- see the fact sheet from a couple months ago regarding 2003-2008 job growth in Right to Work states and non-Right to Work states nationwide.


Stan Greer

 
At 5/11/2009 2:42 PM, Anonymous Machiavelli999 said...

happyjuggler0,

I agree with you about the fact that manufacturing employment is decreasing and perhaps not manufacturing output. And I agree this is due to better productivity due to new technologies. So, I guess what I was trying to say is that employment in manufacturing is dying and unions are mostly present in the manufacturing sector. But this decline in employment has nothing to do with unions themselves. And so because unions are concentrated in manufacturing it seems that associating with unions means declining employment.

As I said, it is a perfect example of confusing correlation for causation.

 
At 5/11/2009 2:46 PM, Anonymous Machiavelli999 said...

And you know this how? Mind you I'm not totally disagreeing with you since the heavy hand of federal government has a large dose of blame coming its way due to fascist tactics of the EPA... In your attempts to blame everything bad on government, you miss the actual reasons manufacturing employment is declining. Higher productivity growth and globalization.

You can set the tax rate to 0% and remove all regulations, but if there are people who want to work in India for 50 cents and hour then that's where industry will go.

I am not saying this is bad, but these are the reasons manufacturing employment is declining in America. And simply because of CORRELATION it seems like unions are to blame.

 
At 5/11/2009 3:24 PM, Anonymous RichRuins said...

Job creation lies in small industries where unionization is not viable. Unions are great at protecting those with jobs, but does not help the unemployed.

 
At 5/11/2009 4:10 PM, Anonymous Anonymous said...

Stiletto heels, the facts don't support your claim that unions have nothing to do with manufacturing decline.

In chained 2000 dollars, the aggregate manufacturing GDP of Right to Work states went up 20.8% from 2000 to 2007, nearly quadruple the aggregate 5.6% gain for non-Right to Work states.

It's not surprising, therefore, that over time the manufacturing job losses are far worse for unionized workers.

From 2003 to 2008, for example, Bureau of National Affairs data show a stunning 19.1% decline in unionized manufacturing jobs, vs. a decline of just 3.7% for nonunion manufacturing jobs.

That isn't because union productivity is rising more rapidly. The evidence is it's rising more slowly. But the loss of market share for unionized firms is so great that their job losses are greater than those of firms whose productivity is rising more quickly.

Stan Greer

 
At 5/11/2009 6:45 PM, Blogger Craig said...

. . . employment in manufacturing is dying and unions are mostly present in the manufacturing sector. But this decline in employment has nothing to do with unions themselves.I beg to differ. There is no stronger incentive for an employer to spend more capital on labor-saving technology than a unionized workforce that has forced wages above the market price.

 
At 5/11/2009 8:52 PM, Blogger Robert Miller said...

This comment has been removed by the author.

 
At 5/11/2009 10:51 PM, Blogger sethstorm said...

"business friendly"That's code for "worker hostile", given how it's been used in the last few decades.

Union or not, that how it is. Since labor relations firms largely have unions as a "nearly solved problem", they turned on our nation via non-union citizens. One example being Grigsby & Cohen using dirty pool to exclude citizens.

Never mind those union-hostile organizations also target citizens who decide to do something about the H1/L1 abuse.

 
At 5/12/2009 4:54 AM, Blogger stilettoheels said...

Stiletto heels, the facts don't support your claim that unions have nothing to do with manufacturing decline.I believe that you are addressing machiavelli.

You have failed to address the threshold issue of data dredging.

Firstly, there is no explanation for the artificial breaks in the 3 data sets. Why not divide the states into equal groupings of 3, 4 or 5 (ranked low, mid and high, etc. union membership) to further test the robustness of the analysis.

Secondly, the multi-generational migration pattern from the northeast and midwest to the south and west is primarily explanatory of private sector payroll growth. People primarily migrate for housing and family related reasons not employment reasons. Control for population growth to test the robustness of the analysis.

 
At 5/12/2009 5:44 AM, Blogger 1 said...

"You can set the tax rate to 0% and remove all regulations, but if there are people who want to work in India for 50 cents and hour then that's where industry will go"...

Hmmm, you might be right about this mach but I'm thinking/guessing its a bit simplistic (for my benefit?) due to various past experiences...

I remember when Ford opened up the first maquilla plant (manufacture of i.c. boards for electronic ignitions) in Nuevo Laredo it was due to pressures by the federal and state governments in this country... This was during the Carter administration...

Within two years there were a bunch more electronic outfits in Nuevo Laredo such as Philco, RCA, Emerson, and so forth all manufacturing various i.c. components and these companies didn't have to deal with the EPA...

It was their common thread and the cost of labor as cheap as it was just barely offset the cost of moving a whole factory to a foreign country, even one as close as Mexico...

 
At 5/12/2009 8:48 AM, Anonymous Anonymous said...

Stiletto heels, as you suggested, here are the aggregate percentage 2003-2008 private-sector job growth rates for all 50 states, divided into five groups of 10 by their 2003 private-sector level of unionization:

#1-10 in unionization -- 3.0%
#11-20 in unionization -- 4.1%
#21-30 in unionization -- 4.7%
#31-40 in unionization -- 6.9%
#41-50 in unionization -- 10.8%

I think any fair-minded person would agree that's a very robust negative correlation between unionization and job growth.

Furthermore, the Census Bureau report you cite doesn't contend, as you imply, that net inflows and outflows of working age people from state to state are primarily due to housing and family considerations. And net movements of working age people, not the vastly greater overall number of moves, are what is relevant here.

Between 1997 and 2007, the number of Right to Work state residents in the 25-34 age bracket increased by 12.7%, from 14.6 million to 16.46 million. Meanwhile, the population aged 25-34 in non-Right to Work states fell by 3.5%, from 24.9 million to 24.02 million.

California is nice and sunny, and has a huge influx of young people from abroad, but still suffered a 1% decline in the number of 25-34 year olds from 1997 to 2007. This is only about "housing" in the sense that young Californians have long been unable to obtain jobs that pay well enough to afford to live there!

Stan Greer

 
At 5/12/2009 10:12 AM, Anonymous Anonymous said...

Let's not forget that Unions are businesses, just like any other business. It is GM's job to make and sell cars, and that is where their money comes from. It is the Unions job to get as many members as possible, and their money comes from union dues. That's it. They get members by exerting monopoly pressure on other business by creating artificial shortages in labor.

Don't make the mistake of thinking Unions are doing all this as some kind of public service. They are in it to make money, just like every other big business. They just have a weird sort of business that makes money by hurting other businesses. If there was not a specific exception for them in the federal anti-trust laws, they couldn't even exist.

I would like to see us stop giving preferential treatment to ANY business. All businesses should be subject to the same anti-trust laws, and we should remove the special protections that unions have. If people want to organize to negotiate more effectively, that is fine, but we should end the state sponsored corporate unions now. That would be the biggest boon to the U.S. car industry. I mean really, what exactly do unions do to help make and sell cars?

Yeah, ok, that will happen. Unions are so bad that I had to post this anonymous cause I don't want Tony and his buddies coming to my house.

 
At 5/12/2009 11:27 AM, Blogger stilettoheels said...

It makes a world of sense to me Stan. The mean quintile of state job growth is 4.7%, the mean quintile of state population growth is 4.7%* in the 2003-08 time frame.

So your next Excel spread sheet is to attach population growth rates to the job growth quintiles.

Texas is the largest state by population in your right-to-work lobbying efforts. It is my position that there is no statistical significance between the Texas state job growth rate (you must be using the payroll survey?, and it would be helpful if you particularized a specific BLS table) and the Texas state population growth rate as compared to the national job growth rate and national population growth rate.

Further, a normalized analysis would use the 25-54 year old cohort (most attached to the labor force), not the younger 25-34 cohort.

Looking forward to your reply.

*Census estimates July 2003-July 2008

 
At 5/12/2009 11:41 AM, Anonymous Janet said...

Anonymous,

Sad, isn't it, that you have to sign off anonymous because of intimidation of pro-union thugs. The same thugs that forced my father to pay his union dues, even though he had an objection to how the union spent those dues - just look at the millions spent on Obama's behalf during the last presidential election. Don't believe every union member is for Democrats. Corrupt unions have put unreasonable demands on business for so long that they have in effect have left them non-competitive and unprofitable. I say apply those anti-trust regulations not just on the auto industry but on the NEA as well. We need to take our country back from the Democratic-entrenched mafia that has run the educational system in this country. The same mafia that now wants to run the banks, auto companies and all aspects of our economy. You can sign my name as Janet, from the depressed state of Michigan.

 
At 5/12/2009 12:10 PM, Blogger Robert Miller said...

This comment has been removed by the author.

 
At 5/12/2009 12:20 PM, Blogger Robert Miller said...

This comment has been removed by the author.

 
At 5/12/2009 12:30 PM, Anonymous Anonymous said...

Stiletto heels, your contention that overall population growth should be factored out in comparing job growth in different states is utterly ridiculous.

Name one even mildly reputable economist who has gone on record as approving such atrocious data torturing, and I will discuss the matter further. Otherwise, forget it. And, since I have identified myself and my affiliation from the outset, I think you should do the same before we continue.

I really don't think you are arguing in good faith, but if you are really interested in comparing population trends for 25-64 year olds (since 55-64 year olds are still mostly in the labor force, even today, I think that's a more reasonable cut off than 54) in RTW vs. non-RTW states, you can do so by looking at the link below. But since you show no evidence of having actually thought about the subject or doing any research up to now, I don't think you will bother.

http://www.nilrr.org/node/88

Stan Greer

 
At 5/12/2009 12:37 PM, Anonymous Anonymous said...

Robert Miller, whatever you think about the merits/demerits of immigration from abroad, there is no correlation, negative or positive, between international immigration to a state and domestic out-migration.

California and New York have large numbers of immigrants from abroad, and large domestic out-migration. Texas, Arizona and Florida have large numbers of immigrants from abroad, and large domestic in-migration. Several other states like Michigan don't have substantial net immigration from abroad, but still have large domestic out-migration.

Therefore, international immigrants to California can't plausibly be said to be "substituting" for native-born labor. Otherwise, (Right to Work) Texas and Florida would be experiencing substantial net domestic out-migration as well. And Michigan would be experiencing domestic in-migration!

Stan Greer

 
At 5/12/2009 6:25 PM, Blogger sethstorm said...

No, Seth, "business friendly" does NOT mean "worker hostile."
You missed part of my point. While there is a certain "disparity" in wages, our nation would have to go down to Third World levels to (completely) remove it.

Businesses aren't the saintly folks you knew in the 60's. They've just rediscovered Taylor's "Scientific Management" and put it to a global level. That is, they consider workers as people that will avoid work instead of performing it. Then you wonder why there is a large push for unions to fill a void that was once occupied by business.

Unions ceased to be the accurate scapegoat when firms in 2003 aimed at non-unionized workers in white-collar professions.

Worker-friendly doesn't have to mean submissive to unions either. It can mean such things as considering the worker as someone who brings in value, not someone who avoids work completely. It means that those who work do not have an inherent fear during their day, but the ability to do well at their work.

In response to the unions being described as thugs:
I'd like to hear about those in business who use labor law firms as their form of thuggery. Point in case being that example of Grigsby & Cohen describing how to avoid hiring a citizen.

 
At 5/13/2009 7:12 PM, Blogger 1 said...

"Businesses aren't the saintly folks you knew in the 60's"...

LOL! What the heck are you talking about?!?!

How do you dream this stuff up sethstorm?

 
At 5/14/2009 1:19 PM, Blogger Robert Miller said...

This comment has been removed by the author.

 

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