Freedomnomics

Article published Wednesday, March 28, 2012 at Investor's Business Daily.

Big Labor's Endorsement For Obama Is All About Repaying Favors

By John R. Lott, Jr. and Grover G. Norquist

This month the AFL-CIO "enthusiastically" endorsed Obama's re-election bid. No surprise there. No previous president has created anywhere near as large wealth transfers to unions.

Obama's $825 billion stimulus package targeted union jobs. Then there was the $26 billion Public Sector Jobs Bill of 2010. And the Disaster Relief and the Summer Jobs Act of 2010 provided another $24 billion to specifically help teachers, police and firefighters.

The stimulus required Davis-Bacon "prevailing wages and benefits" rules for contracts receiving any stimulus money. These rules typically force companies to pay union wages.

In addition, Obama enacted new executive orders that forced some contractors bidding for government contracts to recognize unions and adopt existing collective bargaining agreements. He even went so far in this process as imposing a "gag" order on what firms were allowed to tell employees about unions and collective bargaining in the event that union organizing efforts were undertaken.

According to the Obama administration's recovery.gov, newly released data show that a total of $504 billion of federal contracts, grants and loans to states and territories were awarded between Feb. 17, 2009, and Dec. 31, 2011. The amounts vary a lot across states, with the very lowest at $978 per capita in Virginia and the highest at $2,495 per capita in Alaska. The District of Columbia is the real winner at a whopping $7,603.

Stimulus money didn't go to the states hardest hit by the recession. States with higher bankruptcy, foreclosure and poverty rates as well as lower incomes got significantly less money. And states that had higher unemployment rates received virtually exactly the same amount of money as states with lower rates.

But there was one group that significantly benefitted: unions. The top 10 states receiving the most stimulus money got more than 70% more money per person than the 10 states that received the least money. At the same time those states had more than twice the share of their workers represented by unions.

Right-to-work states obtained about $270 less per capita, and each 10-percentage-point reduction in a state's workforce represented by unions saw a $1.6 billion drop in stimulus dollars given the average state.

Of course, there were other benefits provided unions, such as the National Labor Relations Board preventing Boeing from building planes in right-to-work South Carolina and the sweeping new rules adopted in December that speed union elections, creating so-called "ambush" elections, denying companies sufficient time to respond.

There have been the auto bailouts, with GM alone receiving $50 billion in direct funds, another $45 billion in tax breaks that they don't have to pay on future profits, the expropriation of bonds, the Cash for Clunkers program, and other money to help retool production lines and develop new products.

John R. Lott Jr. is a FOXNews.com contributor. He is an economist and co-author of "Debacle: Obama's War on Jobs and Growth and What We Can Do Now to Regain Our Future.".

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