This week, opponents of the Employee Free Choice Act have been pointing to a fundamentally flawed study, whose findings claim that the US will lose 600,000 jobs in the year 2010 if the Employee Free Choice Act passes. The study cites that "for every three percentage points gained in union membership...the following year's unemployment rate is predicted to increase by 1 percentage point."

We did some research on this study's findings, and here's what we found:

The study, written by Anne Layne-Farrar of a consulting group called LEGC, was funded by a group called "The Alliance to Save Main Street Jobs." It's a typical front group - a type of organization that I refer to, jokingly, as a "Coalition for People and Things," because the name of the organization and its mission are usually vague and meaningless. This "coalition" to "save Main Street jobs" is really the definition of "big business," and includes the U.S. Chamber of Commerce, the HR Policy Association, the Associated Builders and Contractors and the American Hotel and Lodging Association.

The findings of the study itself, we found, have no external validity - meaning that it just doesn't hold up when you apply the findings elsewhere. We found that in many countries where union membership is high, unemployment rates were low. Examples include our best friends from across the pond, including the United Kingdom, Sweden, Denmark and Norway - all of whom have high rates in union density alongside comparable or lower rates of unemployment.

We also put Layne-Farrar's theory to the test. Under her model, we'd expect to find that if union membership decreased - which, it has by more than 20% in the lat 40 years - then unemployment would go down. So, we calculated it out, and found that if true, the United States would currently have a negative unemployment rate of -2.26%. In other words, we would have no unemployment at all in an economy that had more available jobs than workers to fill them. If you've been following the news, you'd know that that's certainly not the case today.

It's no wonder that yesterday, Lawrence Mishel, the president of the Economic Policy Institute, called the study "crackpot economics" that he doesn't "find credible at all."

To read our entire rebuttal, please go here: http://www.seiu.org/a/anne-layne-farrar-wrong-on-unions-and-unemployment.php