Study: ALEC Is Bad for the Economy

<a href="http://www.shutterstock.com">Raymond Gregory</a>/Shutterstock

The American Legislative Exchange Council, the corporate-funded group that generates nearly a thousand pro-business model bills per year and feeds them to state legislatures nationwide, is holding its annual policy summit in the nation’s capital this week to meet with new state lawmakers and “prepare the next generation of political leadership.” This coincides with the release of a report showing that ALEC’s economic prescriptions are not good for the economy.

Each year, ALEC ranks the states on how tightly they adhere to the group’s policy recommendations—from personal and corporate tax rates, to public sector employment levels, to right-to-work laws—as a predictor of their economic growth. The study released Wednesday, by the Iowa Policy Project and Good Jobs First, two policy groups that promote economic growth at the state level, introduces those rankings to reality. It concludes: “A hard look at the actual data finds that the ALEC…recommendations not only fail to predict positive results for state economies—the policies they endorse actually forecast worse state outcomes for job creation and paychecks.” (Though the report is careful to maintain that though ALEC policies are correlated with less prosperous state economies, that doesn’t necessarily mean the policies caused economic decline.)

Let’s take a look. In six key measures of economic growth, ALEC’s “Economic Outlook Rankings” fail to coincide with the actual economic outlook of a state over time. On the horizontal axis we have all 50 states’ ALEC economic grades from 2007, when ALEC started its ranking system. The vertical axis shows the percent change in actual economic performance from 2007 until last year. If ALEC’s fortune-telling were correct , the plotted points would form an upward, rightward line, with a better score corresponding with a better economy. But what happens is pretty much the opposite:

 

Note the downward slope:

 

Whoa, downward slope:

 

A better economy means higher incomes, means more tax revenue, right? 


 

Aaaaand upward slope:

Instead of boosting states’ fortunes, the report finds that ALEC’s preferred policies seem to provide “a recipe for economic inequality, wage suppression, and stagnant incomes, and for depriving state and local governments of the revenue needed to maintain the public infrastructure and education systems that are the true foundations of long term economic growth and shared prosperity.”

DOES IT FEEL LIKE POLITICS IS AT A BREAKING POINT?

Headshot of Editor in Chief of Mother Jones, Clara Jeffery

It sure feels that way to me, and here at Mother Jones, we’ve been thinking a lot about what journalism needs to do differently, and how we can have the biggest impact.

We kept coming back to one word: corruption. Democracy and the rule of law being undermined by those with wealth and power for their own gain. So we're launching an ambitious Mother Jones Corruption Project to do deep, time-intensive reporting on systemic corruption, and asking the MoJo community to help crowdfund it.

We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We want to dig into the forces and decisions that have allowed massive conflicts of interest, influence peddling, and win-at-all-costs politics to flourish.

It's unlike anything we've done, and we have seed funding to get started, but we're looking to raise $500,000 from readers by July when we'll be making key budgeting decisions—and the more resources we have by then, the deeper we can dig. If our plan sounds good to you, please help kickstart it with a tax-deductible donation today.

Thanks for reading—whether or not you can pitch in today, or ever, I'm glad you're with us.

Signed by Clara Jeffery

Clara Jeffery, Editor-in-Chief

We Recommend

Latest

Sign up for our newsletters

Subscribe and we'll send Mother Jones straight to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate

Share your feedback: We’re planning to launch a new version of the comments section. Help us test it.