George Will's column today draws on some new research by Paul Peterson and Daniel Nadler at Harvard. They find that the higher the percentage of public employee who are unionized, the greater risk investors see of the state defaulting on its bonds, resulting in higher interest rates.
This squares with work by Harvard economist Richard Freeman. It should be pointed out that slight increases in borrowing rates are not trivial, as they result in states paying millions, even hundreds of millions, of dollars more in interest payments. Paying more in interest is not in any way good for states' fiscal health.
No surprise here. One must remember that the states on the right had large private sector employers that were largely monopolies or govt protected. Growing up in Conn the Railroad, Phone Company, and defense were "private sector" but were just as militant and nepotism ridden as government. Try to get a job in 1975 in rail, phone or defense plants (all great paying, gaming OT, pensions) without a family sponsor- impossible. They "sold" a product that only govt could buy or protect. That died in mid 80's. Similarly in Detroit (cars) and California (defense aircraft especially during Vietnam). Government jobs served as a balance to "private" sector for good jobs for moderatly/poorly educated - now only Govt provides those jobs- even teachers are lowest educated college grads but protected, so a great job for connected general studies major. In South never those type so high paid protected "private" jobs so no need for govt job and benefits to grow. They are reaping the benefits now.