Fact Check: Will the Employee Free Choice Act Cost America 600,000 Jobs?
03/15/09
A curious claim has been making news this past week – thanks to a business front group called “The Alliance to Save Main Street Jobs.” CBS, MSNBC, the Wall Street Journal and others have reported that when the Employee Free Choice Act is passed, the US will lose 600,000 jobs.
But Anne Layne-Farrar, the economist at corporate consulting firm LEGG who authored the study, relied on flawed research.
Economist Dean Baker points out that Layne-Farrar’s comparison with Canada’s unemployment and union density rates don’t add up:
This study purports to find that a 3 percentage point increase in unionization rates leads to a 1 percentage point increase in unemployment. Based on this study, the opponents of the Employee Free Choice Act argue that any resulting increase in unionization will cost millions of jobs. Of course the immediate response might be to ask, if this study’s findings are accurate, why isn’t Canada’s unemployment rate 7 percentage points higher than the U.S. rate? Canada’s unionization rate is about 20 percentage points higher than in the U.S., yet its unemployment rate is somewhat lower.
The Institute for Southern Studies also took a close look at Layne-Farrar’s work. Their conclusion? “Even as a piece of business research-for-hire, Layne-Farrar’s study is shockingly weak—based on a thin set of old and irrelevant data that doesn’t even bear out her own conclusions.”
Did you hear about this report from your local newspaper or television station? If so, use our letter to the editor tool to let them know that the research is flawed and that rather than destroy American jobs, the Employee Free Choice act will restore the middle class and help rebuild our economy.