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Media, Congress Still Using Dubious Business-Funded ‘Study’ Against EFCA

Yesterday, Facing South reported on a widely-quoted study which claims that the Employee Free Choice Act would cause 600,000 workers to lose their jobs. The study by Anne Layne-Farrar — who is routinely identified as being with the "non-partisan" research group LECG — was in fact funded by leading business groups who have poured tens of millions of dollars into fighting the labor bill.

Facing South was also the first to report that the study is based on a surprisingly shaky set of data: the decades-old experience of just three Canadian provinces where unemployment was likely caused by lots of other factors.

Criticism of the report is gaining steam — but that hasn’t stopped some in the media and Congress from continuing to hawk the study’s dubious claims that the act would destroy the economy.

Some of the follow-up:

* After I cross-posted my piece here at Oxdown Gazette, Jane Hamsher drew on it for excellent pieces at Firedoglake and Huffington Post. As Hamsher points out, Citigroup drew on the dubious Layne-Farrar study in its decision to downgrade Wal-Mart stock, claiming passage of the EFCA would be "a significant drag on earnings."

* Over at TPM Cafe, economist Dean Baker followed up on my coverage of the weaknesses in Layne-Farrar’s study, noting that a growing body of research proves that increasing unionization rates doesn’t increase unemployment:

In 2006, the Organization of Economic Cooperation and Development (OECD) did an exhaustive analysis of the research on this topic and
concluded that there was no link between unionization rates and
unemployment. It is easy to find examples of countries with very high
unionization rates and low levels of unemployment. For example Norway
and Denmark have unionization rates near 80 percent. Before the current
crisis their unemployment rate was under 3.0 percent.

* The labor union SEIU has also weighed in on the study, pointing to a 1988 paper by Harvard economist Richard B. Freeman that concluded a change in union density "has no noticeable effect on economic performance."

But the growing chorus of criticism of Layne-Farrar’s business-backed research hasn’t stopped some from relying on the report to make their point.

In an Op Ed piece today, Rep. Howard P. "Buck" McKeon (R-CA) — the ranking Republican member of the House Committee on Education and Labor — points to the study as damning evidence of why EFCA must be defeated.

In the piece, Rep. McKeon innocently describes Layne-Farrar as "an economist with the non-partisan firm LECG Consulting" — not once mentioning that Layne-Farrar was commissioned by, among others, the U.S. Chamber of Commerce, which has poured over $20 million into lobbying against the Employee Free Choice Act.

From there, Rep. McKeon goes on to say that Layne-Farrar’s anti-EFCA study is solid because it draws on what happened in Canada between 1976 and 1997, which can be used to predict the impact of "widespread card check unionizing."

But Layne-Farrar says in her own study that there isn’t enough data from most Canadian provinces to draw any such conclusions. On page 20 she admits that in only three Canadian provinces is there enough information for any "reasonable estimation of direct effects." And even drawing any conclusions from those three provinces is debatable.

But others agree with Layne-Farrar, Rep. McKeon claims — people like John Mortimer of the Canadian LabourWatch Association, who thinks the EFCA is a horrible idea. I would suspect so: As a list of LabourWatch clients shows, John Mortimer and LabourWatch are industry-hired guns — just like Anne Layne-Farrar and LECG, who are paid by business to oppose labor-friendly legislation.

Which raises an interesting point: Why do publications like The Economist point to Layne-Farrar’s study (thankfully also acknowledging her backers) as if it’s on par with that of more objective scholarship which doesn’t support the business lobby’s conclusions?

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ChrisKromm

ChrisKromm

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