by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Ben Gitis and Sara Rizik of the American Action Forum document some interesting findings involving the links between labor unions and prosperity.
This study analyzes the economic implications of union membership in all 50 states and the District of Columbia as membership has steadily declined for more than three decades. The authors estimate the impact of union membership on real economic growth, average weekly earnings growth, total wage earnings growth, and business establishment sizes. The study shows that union membership hinders economic growth, and, as a result, the decline in union membership has contributed, most likely, to increased economic, job, and earnings growth. Studying 2004-2013, particular results include an additional $115.9 billion in real economic output, 393,189 additional jobs, an additional $6.08 per week in average earnings, and an additional $35.1 billion in total wage earnings. Supported by their research, the authors contend that a continuation of the current downward trend would be beneficial for workers and the U.S. economy. …
… Overall, we find statistically significant evidence that an increase in union membership is associated with a decline in state real GDP growth rate, job growth rate, average weekly earnings growth rate, and total wage earnings growth rate. In general, the impact of union membership is more harmful for workers in smaller business establishments than those in larger ones. Meanwhile, each of our tests on the relationship between union membership and the growth in the number of business establishments yields statistically insignificant results. So while we find that workers suffer from higher unionization, unions impact business growth minimally.