Cause and Effect
Do unions and taxes increase unemployment?
Putting this together, 3 of the 6 states with the highest unemployment (California, Oregon, and Rhode Island) have both high marginal income tax rates and high union representation. Michigan has high unionization but moderate marginal income tax rates, and the Carolinas have high marginal income taxes, but low unionization rates.
Among the 6 states with the lowest jobless rates, 4 have low unionization rates and no state income tax or modest marginal rates and a fifth (Nebraska) has average income tax rates and low unionization. The exception is Iowa, which has average unionization rates (13%) and high marginal income taxes (8.98%).
And here I thought taxes only hurt the rich and union help the little people. I’m shocked. Just absolutely shocked that this might not be true.
April 22nd, 2009 at 11:03 am
So a freer market keeps more people employed while restrictive labor market and high income taxes hurt employment rates? Well I’ll be damned. Who knew?
April 23rd, 2009 at 11:11 am
Yeah, companies move jobs to places where they can abuse workers and not pay taxes. And pedophiles try to get jobs at daycare centers. That doesn’t make it a good idea.
April 23rd, 2009 at 1:15 pm
1. Who is abusing workers?
2. Would people rather have a crappy job or no job at all?
3. What’s wrong with low taxes?
April 23rd, 2009 at 7:53 pm
1. Barring corruption and stupidity, unions are designed to prevent employee abuse and ensure good wages/benefits.
2. The issue isn’t whether people will have good jobs or crappy jobs, the issue is which type of jobs companies will prefer to offer. I’m saying that companies which would have to provide good jobs to union members will move to union-free areas to offer crappier jobs.
3. ‘Low’ is a relative concept- the problem with zero taxes is we can’t have a government, the problem with 50% taxes is we can’t have an economy. The problem with lower taxes is the government can’t do as much to help people, and the problem with higher taxes is it stifles industry. I don’t know exactly what the correct percentage is, but I’m sure it’s farily situational and very open to debate and interpretation.
April 24th, 2009 at 10:08 am
1. haha, so barring human nature, unions are great. Got it.
2. So which is better for the economy, 5 union jobs or 8 non-union jobs? Or, more aptly, 5 union jobs in an unprofitable company, or 5 non-union jobs in a profitable company?
3. Low taxes allow businesses to create more wealth and more jobs, and allow workers to keep more of that wealth for themselves instead of having it redistributed down the chain. Some companies in states with low taxes will be able to hire people who would need government help otherwise, turning would-be leeches into productive members of society.
April 24th, 2009 at 5:12 pm
1. Yeah I’m not trying to support unions I’m just trying to explain the observed phenomenon.
2. It depends on the quality of the union and what you mean by the economy. But it’s a moot point because I don’t believve those are the only options- the economy is probably helped best by well-run companies that can afford to supply good jobs and remain profitable, and the free market is all about making otehr companies that can’t compete fold.
3. That’s pretty much what I said, except I’d add that the government also hires people, and it pays it’s executives a lot less. It also spends the money it takes on programs farmed out to private businesses.