New manufacturing investment and unions

Thomas Holmes ()

No 13-2, Economic Policy Paper from Federal Reserve Bank of Minneapolis

Abstract: Despite recent media stories about both labor unions and the potential revitalization of U.S. manufacturing, most current policy discussions about improving business climate to foster manufacturing neglect the role of unions. This, plus the continued decline in U.S. union membership, might lead one to believe that unions matter little for new investment decisions. This essay argues that, in fact, unions remain an extremely significant factor in decisions by U.S. manufacturers about where they will or will not make new investments. Both unions and manufacturing are discussed in an analysis that distinguishes between new investment at new plants and at existing plants.

Date: 2013
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