Pro-Business? Research Shows GOP “Pro-Business” Policies Hurt Business, Kill Economic Growth


We hear it all the time, republicans are “Pro-business.” They promise if they’re elected, they’ll pass “business friendly” legislation. They claim that their policies will lead to economic growth and job creation. It’s time for a reality check. An analysis of all 50 states clearly shows the negative correlation between the GOP’s ‘pro-business’ policies and job creation and economic growth. In fact, the study shows that the more ALEC backed ‘pro-business’ legislation a state has in place, the worse that state performs, economically.

Two separate studies confirm that the higher a state ranks on the GOP ‘business friendly’ policy charts, the worse it performs economically.

University of Wisconsin Professor Menzie Chinn compared the ALEC-Laffer Economic Competitive Index to actual economic growth. For those not familiar with the ALEC index, it rates states based on ‘pro-business’ policies as identified by the American Legislative Exchange Council. As you might guess, anti-union, “right to work” states, states with the lowest taxes on businesses, states with the fewest regulations and environmental policies etc… rank the highest on their index. According to ALEC, the states at the top of the ‘pro-business’ list have the best economic outlook.

The results of Chinn’s analysis, however, showed that the higher a state scored on the ALEC-Laffer ‘pro-business’ index, the lower the state performed, in terms of real economic growth and job creation. Chinn’s comparison helps to confirm that right wing ‘pro-business’ not only don’t help business, they hurt it. Chinn’s study looked at the most current economic data, 2011 – 2013, a period when right wing state politicians like Michgan’s Rick Snyder and Wisconsin’s Scott Walker began shoving the ALEC agenda down the throats of their constituents.

And then there’s this study, released by the Iowa Policy Project (IPP). Using economic data from 2007 to 2012, the IPP study shows that the lower a state scores on the ALEC-Laffer index, the better it performs economically. Again, the study showed that the states that ALEC ranked as ‘less competitive’ outperformed the states ALEC ranked as ‘most competitive’. States that did not pass ALEC backed legislation performed better in terms of job growth, per capita income growth, and median family income growth, as well. Also of note, the states that ranked highest on the ALEC-Laffer index also ranked higher in terms of poverty. States that enforced ALEC policies saw poverty rates increase and median family income decrease.

But wait, how can that be? Low wages, low taxes, fewer regulations, fewer worker’s rights and protections, fewer evil environmental policies… what’s going on here? Shouldn’t businesses be flocking to take advantage of the GOP’s corporate free for all? Doesn’t every business owner dream of operating in the kind of environment that allows for the outright exploitation of everything, from people to public property?

Apparently not.

The myth that low wages create jobs was decimated in July, when economic data showed that the 13 states that raised minimum wage are creating jobs at a considerably faster pace than the 37 states that refused to raise minimum wage. Average job growth in states that raised the minimum wage was 0.85 percent between January 2014 and June 2014. Average job growth in states that didn’t raise minimum wage was just 0.61 percent.

So much for the lie that higher wages leads to job loss…

Republicans have changed the name of their failed policies more times than we can count. Whether you call it trickle down economics, supply side economics, Reaganomics, “pro-business” or “business friendly” economics, the results of the policies are always the same. A few get richer, most get poorer. Businesses suffer from lack of customers, job growth becomes job loss and everyone loses.

Is it really such a surprise to learn that businesses fair better in stable and healthy communities, the kind that are clean and safe, where students are educated and citizens earn a living wage? Is it a surprise to discover that communities that offer public services, like reliable transportation, police protection, trash pick-up and even a 24 hour fire department are more attractive to businesses, than those who offer big tax discounts?

According to GOP talking points, all business owners care about is low taxes and low wages. Anyone who has ever started a business already knows this is a complete and total fabrication. Before opening a business, a prospective investor carries out a detailed demographic study. If I am selling a product, I’m not putting my business in a place where the average income is below the poverty level. If I am starting an manufacturing industry, I am not putting my business in a place where the work force is uneducated, public transportation is unavailable and public services like police and fire protection and trash pick-up are unavailable. I don’t care how low the taxes are. Unless I am stupid, I know that low taxes don’t bring in customers and they don’t help me build a reliable workforce.