In light of the Obama administration’s decision to appease labor unions by skipping the U.S Conference of Mayors, the Providence Journal had an article examining how unions are hobbling the Ocean State’s economy.
The article notes how unions raise the cost of doing business, and how that is a deterrent for businesses to move or open in Rhode Island:
As the state tries mightily to create jobs, that is not the ideal image for Rhode Island to project, according to experts who help businesses choose where to expand.
Historically, some business owners have been wary of heavily unionized states because collective bargaining yields higher wages and more generous pension and health-care benefits.
Union contracts also make it tough to lower wages, a disadvantage that is “most severe” in a recession, according to Peter Howitt, an economics professor at Brown University.
Moreoever, the article raises concern over the likely damage to the state’s economic reputation as a result of the Obama administration’s decision to skip the conference because of labor protests.
But as word gets out that a union protest chased away the vice president and attorney general –– the Daily Kos has blogged about the “long-standing contract” battle and The Washington Times has reported on the “messy labor dispute” –– Rhode Island’s reputation will suffer, according to Kate McEnroe, whose Atlanta consultancy has helped business select sites for expansion since 1993.
“If that gets pick up and enters the zeitgeist, is that going to give people a positive impression? No,” McEnroe said.
As we stated earlier, the administration decided that listening to the labor unions was more important than helping local governments across the country implement the stimulus. The irony here is that the Obama administration’s decision to skip the conference may actually hurt Rhode Island’s long-term reputation with employers and diminish future job opportunities.