EFCA-nomics: A Reminder That It Will Cost Jobs
Tuesday, March 3rd, 2009 by adminThe twitter world is experiencing a minor tweetfest on the effort to convince Americans that EFCA would actually be a net positive for the economy. Union groups are crowing that they’ve scratched together 40 economists saying as much (40 economists and a five-dollar bill will get you a cup of coffee in New York City). We have a pretty strong hunch that there’s plenty of academic research out there — published and not as yet — proving otherwise.
Here’s one reminder that EFCA will cost jobs:
These changes would tilt the balance of power in favor of unions, and come at the expense of workers, employers and the overall economy. We know from a substantial body of research that the key to a prosperous labor market is adaptability, both on the part of employers and employees. Indeed, a growing body of research confirms such flexibility in labor markets results in better job creation, investment and prosperity compared to more heavily regulated labor markets.
For example, Harvard professor Rafael Di Tella, along with his Princeton counterpart Robert MacCulloch, looked at 21 industrialized countries from 1984 to 1990 to ascertain the influence of labor market flexibility. They found that flexible labor markets enjoyed lower rates of unemployment, and in particular lower rates of longer-term unemployment.
What does that mean in plain English? Simple: EFCA will cost jobs.
Tags: EFCAnomics
