Where the Jobs Are

A fascinating nugget from the National Institute for Labor Relations Research:

To convince voters things were getting better, the Obama campaign pointed to the millions of jobs that have been created since the recession officially ended in June 2009.  Household employment data for the 50 states and Washington, D.C., … do show an overall net gain of 2.59 million jobs through this September…

Ironically, the bulk of the increase occurred in the 22 states that have had Right to Work laws on the books since June 2009. Their aggregate household employment grew by 1.86 million, or 3.4%.  (Since Indiana did not adopt its Right to Work law until this February, the 19,000 jobs it added are not included.)  …

Right to Work states (again excluding Indiana) were responsible for 72% of all net household job growth across the U.S. from June 2009 through September 2012.  If these states’ job increase had been no better than the 0.85% experienced by forced-unionism states as a group, the nationwide job increase would have been less than half as great. And the President wouldn’t have been able even to pretend the economy was in recovery.

Another interesting (though unsurprising) note: of the 23 states with right-to-work laws (I am including Indiana), 19 went for Romney in the Electoral College (Florida, Iowa, Nevada, and Virginia were the exceptions).

  1. Zafar

    Do you measure productivity just by comparing dollars spent with value produced?

    In that case you could leave everything else the same, halve wages, and deliver a productivity dividend.

    Don’t you need to factor in output per worker to get an idea of how productivity growth is being achieved?

  2. Pseudodionysius

    To quote the Simpson’s episode with Governor Schwarzenegger:

    “I was elected to lead; not to read.”

  3. 2klbofun

    How many of those states have Republican Governors and/or Legislatures?

  4. Troy Senik, Ed.
    C
    2klbofun: How many of those states have Republican Governors and/or Legislatures? · 0 minutes ago

    Don’t have the legislative figures in front of me, but after this cycle only one (Arkansas) has a Democratic governor.

  5. Scott R

    Success, limited as it is, happens in spite of this man, not because of him. The natural gas/shale oil/fracking boom is another example.

    He is officially the luckiest man in all of human history.

  6. Pseudodionysius
    Scott Reusser: Success, limited as it is, happens in spite of this man, not because of him. The natural gas/shale oil/fracking boom is another example.

    He is officially the luckiest man in all of human history. · 0 minutes ago

    The way Benghazi is turning into an Agatha Christie Orient Express style murder mystery, I’d say Barry may be thinking he’s trapped on Pelham 1,2, 3 with Rush Limbaugh his only way out.

  7. KC Mulville

    Question for Republican governors: seriously, would it kill you to take it easy before the next election?

  8. Joseph Eagar

    How is productivity growth?  The convention wisdom is that Republicans create jobs, while Democrats create productivity; doing both is something of a holy grail of public policy.

    Perhaps the biggest economic policy question of the next few years is whether we can rely on deregulated, dynamic markets to drive productivity growth (traditionally the Republican approach), or if we need to rely more on upward pressure on real wages, and start raising the minimum wage (traditionally the Democratic approach).  No one really knows, though I suspect a mix of the two is best (Sweden comes to mind), though that seems to require an insane level of cooperation and trust between employees and management, something organized American labor is dead set against.

  9. Garrett Petersen
    Joseph Eagar: How is productivity growth?  The convention wisdom is that Republicans create jobs, while Democrats create productivity; doing both is something of a holy grail of public policy.

    I’ve never heard this “conventional wisdom”.  How exactly are Democrats’ policies promoting productivity?  It seems like all their redistribution is destroying the incentive to be productive, if you ask me.

  10. Fake John Galt

    We obviously need to get rid of “right to work” laws so the jobs will be evenly distributed.

  11. Joseph Eagar
    Garrett Petersen

    Joseph Eagar: How is productivity growth?  The convention wisdom is that Republicans create jobs, while Democrats create productivity; doing both is something of a holy grail of public policy.

    I’ve never heard this “conventional wisdom”.  How exactly are Democrats’ policies promoting productivity?  It seems like all their redistribution is destroying the incentive to be productive, if you ask me. · 12 hours ago

    Increasing pressure on real wages does drive productivity growth—look up the graph of Greece’s productivity growth, for example—but often comes at a price of higher structural unemployment, stagflation, and in the worst cases economic collapse.

    If you think about it, businesses will respond to higher labor costs by increasing the ratio of capital to workers, through automation, process innovation, etc.  But like I said, this pretty picture can get quite ugly in practice.

  12. Joseph Eagar
    Zafar: Do you measure productivity just by comparing dollars spent with value produced?

    In that case you could leave everything else the same, halve wages, and deliver a productivity dividend.

    Don’t you need to factor in output per worker to get an idea of how productivity growth is being achieved? · 7 hours ago

    Edited 7 hours ago

    I mean output per worker, yes.

  13. AIG

    Joseph Eagar, perhaps I don’t understand what you mean by “productivity”, but that’s not what I’m reading in your comments. There’s no mechanism of increasing “productivity” through a fabricated “upward pressure on wages”. Productivity is a measure of output/input. 

    I think you mean to imply that “higher benefits” (not necessarily wages) imply higher productivity. Sure, but raising minimum wages in not such an example (or any other artificial mechanism of increasing wages through power imbalances, as they do in Sweden). 

    Business takes care of increasing productivity quite well on its own. It requires no government intervention. Quite the opposite, since it requires free labor markets.

    PS: The US productivity/worker is about 20% higher (per hour) than in Sweden. The US is the highest in the world, barred heavy oil/financial-based economies (Norway, Netherlands, Luxembourg). 

  14. AIG

    If I may make an additional comment, this is partially our own doing. 

    I.e., we conservatives do not emphasize that government does NOT create jobs, that government only facilitates job growth when it removes barriers it has artificially placed. Instead, we repeat the rhetoric that “Obama did not create jobs”, ingraining in people’s minds the idea that “government creates jobs”. 

    When Romney runs on a platform of “I will create jobs”, he is reemphasizing the notion that the government creates jobs. So can one blame the average voter (remember how well informed they are)  for connecting higher jobs with Obama or whomever is in power at a given moment? 

    Our message ought to be: People create jobs. Government needs to get out of the way. We shouldn’t ask government to create jobs, or hold it responsible for “not doing enough”. Government shouldn’t be “doing” anything to create jobs, it should stop doing things. 

    We’ve got the direction of the relationship between gov. action and “jobs”…backwards. 

  15. AIG

    Sorry, I still don’t see it. Productivity per worker is not the same as productivity. Productivity is simply a ratio of input/output. If you increase productivity per worker, while having a net decrease in productivity, you’re not improving your situation. Likewise, if automation delivered a net gain in productivity, it would happen on its own. If it happens because of artificial pressures in input prices (e.g. wages), then you are only gaining a relative productivity gain over your next best alternative, but not a net one. 

    Raising input prices can’t increase productivity. That’s kind of like the logic that if I increase your taxes, you will work harder to make up for them. 

    Of course, things have to happen “on their own”, through a supply-demand relationship, in order to increase productivity/efficiency. If they are artificial, they don’t produce a net gain. 

    Greece’s productivity over the decades has to do with individual sectors of the Greek economy that are productive (some have to be, even in Greece), and a flood of immigration. 

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