On Drawing Bad Inferences

Professor Mark Perry, at his Carpe Diem blog, posted an excerpt from a lengthy story by Steven Malanga about how unions have essentially destroyed California’s economy.

Without addressing the merits of Mr. Malanga’s argument, I do take exception to the “evidence” Professor Perry uses to support it, which is a chart of the unemployment rate of the United States vs. that of California:



While there may — or may not — be a correlation between the degree of unionization of a state’s workforce and the strength of that state’s economy, as Mr. Malanga argues, I do not believe that correlation is best reflected by a simple comparison of unemployment rates.

California, as we well know, was among the ground-zero sand states that saw their real estate markets go supernova.  Consequently, California saw the percentage of its workforce in construction significantly exceed that of the other 49 states — and then come back down to earth:


Source: BLS.gov, Series: SMS06000000000000001, SMS06000002000000001,
CES0000000001, CES2000000001


As that excess has been — and continues to be — worked off, it stands to reason that Cali’s unemployment rate would disproportionately suffer (having nothing to do with unions).  I would respectfully submit this is a more likely scenario than simply pointing a wayward finger at unions.

But, as we know, it’s all about what’s politically expeditious and ideologically convenient, not necessarily what’s true . . .

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