Modern conservatism has been repeating the same balderdash for three decades -- that unions are bad for the economy. The Fraser Institute, predictably, has jumped on the bandwagon. Andrew Jackson writes in The Globe and Mail:
A new study by the Fraser Institute argues that introduction of anti-union “right to work” laws in Canada would boost manufacturing output and jobs. While they are right that these laws, which make dues payments voluntary, severely weaken unions, it is far from evident that unionization comes at the cost of poorer economic performance.
In fact, Jackson writes, some of the Institute's own work undermines its argument:
Ironically, recent work by the Fraser Institute itself suggests no link between higher unionization and poor economic performance. The think tank’s 2012 report on labour markets in Canada and the United States found that all Canadian provinces rank ahead of all U.S. states in terms of union and labour rights, but the 10 provinces rank in the top 21 states and provinces in terms of labour market performance between 2007 and 2011. (The index is based on job growth, unemployment and productivity growth.)
Evidence from the United States -- where there has been a concerted push to enact "right to work" laws -- suggests that discouraging unions suppresses economic growth:
In fact, North Carolina – which has the lowest unionization rate in the United States at just 4.1 per cent – lost a third of its manufacturing jobs over the past decade. But Massachusetts and New Hampshire, which have significant high-tech industries, have unionization rates well above the American average. Firms seeking very low wages are more likely to move to developing countries than “right-to-work states.”
And a recent study by the World Bank discovered the same thing. More importantly, the same study argues that suppressing unions increases economic inequality:
A major World Bank study found no relationship between the rate of unionization and national economic or employment performance: “Union density per se has a very weak association, or perhaps no association, with economic performance indicators such as the unemployment rate, inflation, the employment rate, real compensation growth, labour supply, adjustment speed to wage shocks, real wage flexibility, and labour and total factor productivity. There is, however, one significant exception: Union density correlates negatively with labour earnings inequality.”
Conservatives have been selling economic snake oil for a long time. The evidence is in. What they say simply isn't true.
