You hear from lots of people — including lots of economists — that they do. Because they’re monopolistic price-fixers, they distort economic decisions and make us all worse off.
The theory makes sense, as far as it goes. But if it were really true you’d expect to see it in the data. This got me curious…
Compare percent union representation to GDP/capita by state:
The correlation is actually pretty strongly positive — .56. More union representation, more prosperity. (Or the other way around…)
It’s also worth noticing: Lower-left, red states. Upper right, blue states. Go figger.
Update: I really do have to point out the other delicious oddity here: Sarah Palin’s Socialist Utopia of Alaska is second only to the Evil Empire, New York, in union representation.
Union density: http://www.bls.gov/news.release/union2.t05.htm
State GDP/capita: http://www.bea.gov/regional/gsp/