Latest Right-Wing Canard: "If Workers' Productivity Increased, Workers' Wages Would Rise"

[Joanne98]

In the Washington Post, we get this little nugget of anti-labor corporate PR posing as empirical economics:

Anne Layne-Farrar, an economist with the consulting firm LECG who produced a study predicting job losses if the bill passes, said in a conference call organized by employers that increased productivity had not resulted in larger wage gains in recent decades because the growth was mostly the result of technology. "If the productivity of labor went up, then the wages of labor would go up," she said.
It's the old "Workers Are Paid Poorly Because They Are Lazy and Unproductive" Canard - and, of course, it is refuted by the actual data:


Real Wages Fail to Match a Rise in Productivity
With the economy beginning to slow, the current expansion has a chance to become the first sustained period of economic growth since World War II that fails to offer a prolonged increase in real wages for most workers...

The median hourly wage for American workers has declined 2 percent since 2003, after factoring in inflation. The drop has been especially notable, economists say, because productivity - the amount that an average worker produces in an hour and the basic wellspring of a nation's living standards - has risen steadily over the same period.

Workers stagnating wages has nothing to do with decreased productivity - as the Times article notes, wages are stagnating despite increases in productivity. The truth is what business and its anti-labor front groups don't want to admit: That workers' wages have stagnated because workers have not been able to collectively bargain for better pay. That's what the Employee Free Choice Act aims to fix.

http://www.openleft.com/showDiary.do?diaryId=12269

[billyoc]

1. Your link looks weird. Good stuff, though.

http://www.openleft.com/showDiary.do;jsessionid=5D9DAF212F37C76514D0B9DDD87D5AE1?diaryId=12269

[billyoc]

2. Damn, I can't get the link to post right either.

:shrug:

[Joanne98]

5. I fixed it. Thanks

[Omaha Steve]

3. Lets use this one

http://news.bbc.co.uk/2/hi/business/5303590.stm



Slowing wages

"The unprecedented split between growth and living standards is the defining economic agenda of the day," says the EPI's senior economist, Jared Bernstein.

During the five years from 2000 to 2005, the US economy grew in size from $9.8 trillion to $11.2 trillion, an increase in real terms of 14%.

Productivity - the measure of the output of the economy per worker employed - grew even more strongly, by 16.6%.

family incomes

But over the same period, the median family's income slid by 2.9%, in contrast to the 11.3% gain registered in the second half of the 1990s.


Good post btw.

OS

[Xipe Totec]

4. If you cut executive pay in half, their net productivity doubles

And after pissed off execs quit, the productivity of the remaining execs goes up further.

[cpamomfromtexas]

6. That didn't work for airline employees

[Earth Bound Misfit]

7. Seems the "Rent-a-Researcher" didn't quite deliver the goods...

http://www.southernstudies.org/2009/03/rent-a-researcher-business-groups-peddle-dubious-study-claiming-labor-bill-would-cause-job-losses.html

Research for Hire: Business groups bankroll shaky study claiming job losses from labor bill

One report in particular has been seized on by business groups and the media as proof that the bill would be an economic disaster -- a study released last week which claims that the EFCA would ultimately destroy 600,000 jobs.

CBS, MSNBC and The Wall Street Journal have all covered the study, as have a slew of conservative websites like Pajama's Media. But few have asked who's behind the report -- and even less have looked under the hood at the research itself, which is based on a surprisingly tiny sliver of data from just three Canadian provinces dating back 33 years.

snip

NORTHERN EXPOSURE

Not only have media sources failed to identify who's backing the study -- they've also been slow to look into Layne-Farrar's claims and methodology, which are based entirely on decades-old data from a handful of Canadian provinces.

snip

But back to the report's argument. Layne-Farrar builds her entire claim that the EFCA and resulting rise in union membership will lead to mass unemployment around one set of data -- namely, "a panel dataset of Canadian provinces over the twenty-two year period 1976-1997" (page 20).

Why Canada? Because, she says, their economy is roughly similar to the U.S. Canada is also unique in that labor laws differ between the country's 10 provinces -- some provinces use EFCA-like "card check" and others that don't, and one can compare the results.

But buried in page 20, Layne-Farrar herself admits that the data from which her entire argument is constructed isn't so great after all:

While the Canadian dataset is quite rich, it does have its limitations. For example, out of ten provinces that experienced changes in labor institutions (i.e., card check vs. mandatory voting) between 1976 and 1997, only three had enough variation in the card check rules themselves over time to allow for the reasonable estimation of any direct effects.

So instead of comparing 10 provinces, the study is really based on the experience of just three: Alberta, British Columbia and Newfoundland, from which Layne-Farrar proceeds to extrapolate how many jobs will supposedly be lost in the U.S. if EFCA is to pass.

But does even this small sampling of three Canadian provinces tell us much of anything about card check, unions and unemployment?

Not really, given all the other factors that contribute to losing jobs. For example, in Newfoundland, one of Canada's poorest provinces, unemployment has always been high -- but that has more to do with the boom and bust of the oil and fishing industries in the coastal province than anything to do with card check.

snip

But Layne-Farrar doesn't take any of these realities into account. And she ignores the most obvious evidence of all: If unions really were the cause of unemployment, why has Canadian unemployment risen in recent years -- including 241,000 jobs lost in manufacturing along between 2001 and 2007 -- even as union membership has declined?

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.

If businesses bankrolled Layne-Farrar in hopes that her research and testimony would be a silver bullet that could help stop the Employee Free Choice Act, they didn't get their money's worth.

[Earth Bound Misfit]

10. Shameless self-kick of an old post

I've noticed lately many anti-EFCA arguments are citing this P.O.S. "study" by Dr Anne Layne-Farrar, and thought I'd give this a kick to point out the GLARING deficiencies in this report to those who may have missed it.

Dr. Layne-Farrar works for the Law and Economics Consulting Group (LECG), described as a "non-partisan economic consulting group in Chicago"

Dr Farrar notes on the first page of the report: "Financial support from The Alliance to Save Main Street Jobs is gratefully acknowledged". Hmmm. Who or what is "The Alliance to Save Main Street Jobs" you ask?

About the Alliance to Save Main Street Jobs:

The Alliance is chaired by HR Policy Association and includes the American Hotel and Lodging Association, the Associated Builders and Contractors, The International Council of Shopping Centers, the Real Estate Roundtable, the Retail Industry Leaders Association and the U.S. Chamber of Commerce

Non-partisan. That's a good one.

[madrchsod]

8. we are the best fucking workers in the world

we produce more per 40 hr hour week than anyone expect the irish. we work more overtime than anyone else in the industrialized world boosting our output above any other industrialized nation.
anne can go fuck herself with a chinese dildo

[Deja Q]

9. Tell him to try the diet kool-aid instead. The regular stuff makes him hyper and inaccurate.