Lies, Damn Lies and Conservative Statistics

All one in the same.  Let’s talk job growth, unions and right-to-work laws, shall we?

I was intrigued by a tweet from one of my favorite Twitter conservatives.  A reasonably engaging fellow, he tweeted the following

Well, that could certainly pose a problem for us pro-Union folks.  Clicking on the link he provided, I was sent to a rather old Forbes article from February this year that did indeed seem to indicate some correlation between job growth and union membership.  The author, Kurt Badenhausen wrote

Over the past 15 years non-RTW states have averaged employment growth of 7.5%. Job growth for RTW states has been almost twice as fast at 14.4%. All but two of the 20 states with the smallest union presence are right-to-work states (Colorado and New Mexico are the exceptions). Meanwhile Nevada is the only RTW state among the 20 states with the largest union presence.

The future looks to be more of the same. Below are the states expected to add employees the fastest and slowest over the next five years along with their union presence. Oklahoma is the only right-to-work state among the 10 states with the worst job growth forecast.

Let’s unpack this, shall we?  First of all, correlation is not causality.  That’s important to remember whenever someone tells you that because A and B move together, the movement of B is dependent upon the movement of A in some meaningful way.  That may or may not be true.  There could be a third variable, C that is acting on both.  But for the sake of this discussion, let’s accept the premise that indeed, job growth rates are higher and are expected to be higher in RTW states.

One factor that is not considered in the correlation of RTW to employment growth is population migration.  People moving from the north to the south has been going on for some time.  There is no denying that Americans want to live in warmer climates, this is especially true as the population ages.  Also, southern states have a larger immigrant population.  Much has been written about the so-called Texas miracle that show that it was a phenomenon of demographic shifts and not of government policies.

But I’d like to look at overall unemployment figures for a couple of select states.  In the list, Florida and Texas are listed as having the highest growth rates and Vermont and Montana the lowest.

As you can plainly see, the states with higher unemployment rates (FL and TX) have higher growth rates, while states with lower unemployment rates (VT and MT) have lower growth rates.  I’m not claiming that this is in any way comprehensive, but I just have to wonder if the correlation / causation posited by the author is not a self-fulfilling prophecy.  As he writes in the piece

Area Development’s 24th Annual Corporate Survey of corporate executives found that 74% of respondents felt being a right-to-work state was “important” or “very important” among site selection factors. As part of the Area Development survey, Nucor Steel President of Human Resources Jim Coblin said, “Right-to-work is very important to us, especially when we go to build a plant. Given the choice, we prefer right-to-work because it allows much more freedom for our employees.”

I think what Coblin meant to say was that “Right-to-work is very important to us, especially when we go to build a plant. Given the choice, we prefer right-to-work because it allows much more freedom for from our employees.”

In a nation like Germany where unions are the norm and one state is not allowed to compete with another state on low-wages, what might America look like in that scenario?  In Germany, the top 1% take approximately 11% of national income.  In America? 21%.

The only people who benefit from Right-To-Work laws are employers.  As I wrote this past summer,

How, then, to evaluate the impact of these RTW laws on the people of these states?  Implemented to provide more “freedom” for workers, did it really play out that way?  Let’s examine some core social and economic measures comparing states with RTW laws and states which protect worker’s rights to unionize.  The question is not whether companies can generate more profits in RTW states, but rather to compare the quality of life for residents of RTW and non-RTW states.

Based on data from 2005, it’s clear that RTW states suck up more Federal Benefits and workers get paid less.  Across a wide range of measures, citizens in RTW states fare worse than their brothers and sisters in pro-union states.  The average wage in RTW states is $7,166 lower and the RTW states receive $0.18 more return on every tax dollar than union states.  The redistribution of wealth from union to non-union states is undeniable.  Workers and citizens in RTW states have lower levels of academic achievement (averaging 3.2% worse in RTW states), lower heath measures (higher obesity in RTW states, for instance) and higher incidents of STDs and teen pregnancy (13 more per 1000).  While the issue of unionism is only an indirect contributor to these measures, household income and access to quality public education is critical, and unionism is tied directly to wages.  With lower wages, RTW states lack the resources that pro-union states have to ensure a better life for their citizens.

When the states compete for workers, workers are the ones who lose.


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